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Speaker:

Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), director general of the Department of Comprehensive Statistics of the NBS

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

April 16, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today's press conference is a regular briefing on China's economic data. We are delighted to be joined by Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS) and director general of the Department of Comprehensive Statistics of the NBS. Ms. Liu will introduce details concerning China's economic performance in the first quarter of 2021 and answer your questions. Now, let's give the floor to Ms. Liu.

Liu Aihua:

Thank you. I'll start by briefing you all on China's economic performance in the first quarter of this year and then take your questions. The national economy has seen a good start in the first quarter. Faced with the impact of the COVID-19 pandemic during winter and spring as well as uncertainties in the external environment, local authorities and government departments have all worked under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, faithfully implemented the decisions and plans of the CPC Central Committee and the State Council, and consolidated and expanded the progress on epidemic prevention and control and socioeconomic development. Macro policies are being implemented in a scientific and targeted manner. As a result, China's national economy delivered a stable performance with a consolidated foundation and a good momentum of growth. The demand of production was expanded, market vitality improved, employment and consumer prices remained stable, and people's well-being was fully guaranteed. The national economy has seen a good start to the year.

According to preliminary estimates, gross domestic product (GDP) in the first quarter reached 24,931.0 billion yuan, up by 18.3% year on year at comparable prices, or up by 0.6% compared with the fourth quarter of 2020 and 10.3% compared with the first quarter of 2019, with an average two-year growth of 5.0%. By industry, the value added of the primary industry was 1,133.2 billion yuan, up by 8.1% year on year, or an average two-year growth of 2.3%; that of the secondary industry was 9,262.3 billion yuan, up by 24.4% year on year, or an average two-year growth of 6.0%; and that of the tertiary industry was 14,535.5 billion yuan, up by 15.6% year on year, or an average two-year growth of 4.7%. On one hand, the year-on-year GDP growth of 18.3% in the first quarter was affected by such unique factors as the low base figure of last year and the increased working days due to staff staying put during the Spring Festival. On the other hand, the quarter-on-quarter growth of 0.6% in the first quarter, with the average two-year growth reaching 5.0%, demonstrated the steady recovery of the national economy.

First, the overall agricultural production was steady, and pig production recovered significantly. 

In the first quarter, the value added of agriculture (crop farming) witnessed a year-on-year increase of 3.3%, with an average two-year growth of 3.4%. With the current favorable climatic conditions in major farming areas, spring ploughing and sowing progressed well, and the winter wheat grew slightly better than average. In the first quarter, the output of pork, beef, mutton and poultry was 22 million metric tons, up by 21.4% year on year. Of this total, pork output was up by 31.9%, milk was up by 8.5% and eggs were down by 2.1%. Pig production recovered significantly. At the end of the first quarter, the number of pigs registered in stock was 415.95 million, up by 29.5% year on year, among which 43.18 million were breeding sows, up by 27.7%. 

Second, industrial production rebounded steadily, and the manufacturing industry demonstrated strong growth.

The total value added of industrial enterprises above the designated size grew by 24.5% year on year in the first quarter of 2021, or up by 2.01% quarter on quarter, with an average two-year growth of 6.8%. Of this total, the total value added of industrial enterprises above the designated size in March increased by 14.1% year on year, up by 0.60% month on month. An analysis by type of ownership showed that in the first quarter, the value added of state holding enterprises was up by 16.9% year on year; that of share-holding enterprises was up by 23.7% year on year; that of enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan was up by 29.2% year on year; and that of private enterprises was up by 29.7% year on year. In terms of sectors, the value added of mining increased by 10.1% year on year, with an average two-year growth of 4.0%; that of manufacturing increased by 27.3% year on year, with an average two-year growth of 6.9%; and the production and supply of electricity, thermal power, gas and water increased by 15.9% year on year, with an average two-year growth of 4.8%. The value added of equipment manufacturing and high-tech manufacturing increased by 39.9% and 31.2% year on year, respectively, with average two-year growth of 9.7% and 12.3%, respectively. Specifically, the production of new-energy vehicles, industrial robots, excavating and shoveling machinery, microcomputers and integrated circuits all witnessed year-on-year growth of over 60%, with the average two-year growth exceeding 19%. In March, the Manufacturing Purchasing Managers' Index (PMI) stood at 51.9%, staying above the threshold for 13 months in a row; and the Production and Operation Expectation Index was 58.5%.

From January to February, profits from industrial enterprises above the designated size reached 1,114.0 billion yuan, 2.79 times that of the first two months of last year, or an average two-year growth of 31.2%; and the profit rate of the business revenue of industrial enterprises above the designated size was 6.60%, which was 3.15 percentage points higher than that of the first two months in 2020.

Third, the service sector experienced restorative growth, and market expectations were positive.

The first quarter witnessed a steady recovery of the service sector. Of this total, the value added of transportation, storage and postal services and that of real estate services grew by 32.1% and 21.4% year on year, respectively, with average two-year growth of 6.6% and 6.8%, respectively. In March, the Index of Services Production grew by 25.3% year on year, with an average two-year growth of 6.8%. In the first two months, business revenue of service enterprises above the designated size grew by 37.8% year on year, with an average two-year growth of 10.0%. Of this total, the business revenue of information transmission, software and information technology services and that of scientific research and technology services grew by 35.0% and 47.8% year on year, respectively, with average two-year growth of 17.4% and 11.5%, respectively. In March, the Business Activity Index for services stood at 55.2%, which was 4.4 percentage points higher than that in February. The Business Activity Index for railway transportation, air transportation, telecommunication, broadcast, television and satellite transmission services, software and information technology services, monetary and financial services stayed within the high expansion range of 60.0% and above; the Business Activity Index for accommodation, leasing and business services and resident services hit hard by the spread of COVID-19 in some areas at the beginning of the year rebounded to the expansion range. From the perspective of market expectations, the Business Activity Expectation Index for services stood at 62.9%, remaining within the high expansion range of 60.0% and above for two consecutive months.

Fourth, market sales improved gradually, and online retail sales grew rapidly.

In the first quarter, the total retail sales of consumer goods reached 10,522.1 billion yuan, up by 33.9% year on year, or up by 1.86% quarter on quarter, with an average two-year growth of 4.2%. Specifically, in March, the total retail sales of consumer goods reached 3,548.4 billion yuan, up by 34.2% year on year, 0.4 percentage point higher than that in the first two months, with an average two-year growth of 6.3%, or up by 1.75% month on month. Analyzed by different areas, the retail sales of consumer goods in urban areas reached 9,134.5 billion yuan, up by 34.6% year on year, or an average two-year growth of 4.3%; and that in rural areas rose by 29.4% year on year to 1,387.5 billion yuan, with an average two-year growth of 3.2%. Grouped by consumption patterns, the income of catering was 1,059.6 billion yuan, up by 75.8% year on year, or an average two-year decline of 1.0%; and the retail sales of goods was 9,462.5 billion yuan, up by 30.4% year on year, or an average two-year growth of 4.8%. Grouped by categories, for the retail sales of goods by enterprises above the designated size in the first quarter, the year-on-year growth rates of 18 categories of goods exceeded 10%. Specifically, the retail sales of sports and recreational goods and communication equipment grew by 45.2% and 42.4% year on year, respectively, with average two-year growth of 17.4% and 17.1%, respectively. Online retail sales reached 2,809.3 billion yuan, up by 29.9% year on year, with an average two-year growth of 13.5%. Specifically, the online retail sales of physical goods totaled 2,306.7 billion yuan, up by 25.8% year on year, with an average two-year growth of 15.4%, accounting for 21.9% of the total retail sales of consumer goods, which was 1.2 percentage points higher than that in the first two months of this year.

Fifth, fixed asset investment recovered steadily and investment in high-tech industries and social sectors grew quickly.

In the first quarter, the investment in fixed assets (excluding rural households) reached 9.5994 trillion yuan, up by 25.6% over last year, or up by 2.06% quarter on quarter with an average two-year growth of 2.9%. In March, the investment in fixed assets (excluding rural households) grew by 1.51% month on month. Specifically, in the first quarter, the investment in infrastructure was up by 29.7% year on year, an average two-year growth of 2.3%; manufacturing was up by 29.8% year on year, an average two-year decrease of 2.0%; and real estate development was up by 25.6% year on year, an average two-year growth of 7.6%. The floor space of commercial buildings sold reached 360.07 million square meters, up by 63.8% year on year, an average two-year growth of 9.9%. The total sales of commercial buildings was 3.8378 trillion yuan, up by 88.5% year on year, an average two-year growth of 19.1%. By industry, investment in the primary industry increased 45.9% year on year, with an average two-year growth of 14.8%; in the secondary industry it was up by 27.8% year on year, with an average two-year decrease of 0.3%; and the tertiary industry grew by 24.1% year on year, an average two-year growth of 4.0%. Private investment went up by 26.0% year on year, an average two-year growth of 1.7%. Investment in high-tech industries grew by 37.3% year on year, an average two-year growth of 9.9%. Specifically, the investment in high-tech manufacturing and high-tech services grew by 41.6% and 28.6% year on year, respectively, with average two-year growth of 10.7% and 8.2%, respectively. In terms of high-tech manufacturing, investment in the manufacturing of medical equipment, measuring instruments and meters, and in the manufacturing of computers and office devices grew by 50.0% and 49.5% year on year, respectively, with average two-year growth of 9.1% and 24.2%, respectively. In terms of high-tech services, investment in testing services and in research, development and design services went up by 55.7% and 48.2% year on year, respectively, with average two-year growth of 14.8% and 21.5%, respectively. Investment in social sectors increased 31.7% year on year, with an average two-year growth of 9.6%. Specifically, investment in the health sector and education sector went up by 50.9% and 27.0% year on year, respectively, with average two-year growth of 22.3% and 10.4%, respectively.

Sixth, imports and exports of goods grew noticeably and the trade structure continued to improve.

In the first quarter, the total value of imports and exports of goods was 8.4687 trillion yuan, an increase of 29.2% over the previous year. The total value of exports was 4.6140 trillion yuan, up by 38.7% year on year; and that of imports was 3.8547 trillion yuan, up by 19.3% year on year. The trade balance was 759.3 billion yuan in surplus. In March, the total value of imports and exports of goods was 3.0228 trillion yuan, up by 24.0% year on year. The total value of exports was 1.5554 trillion yuan, up by 20.7% year on year; and that of imports was 1.4674 trillion yuan, up by 27.7% year on year. The trade structure continued to improve. In the first quarter, the imports and exports of general trade accounted for 61.2% of the total value of imports and exports, 1.3 percentage points higher than the same period of the previous year. The imports and exports by private enterprises accounted for 46.7% of the total value of imports and exports, 4.4 percentage points higher than the same period during the previous year. 

Seventh, consumer prices maintained the same level year on year and producer prices for industrial products went up year on year.

In the first quarter, consumer prices maintained the same level as the previous year. In March, consumer prices were up by 0.4% year on year, and down by 0.2% in February; or down by 0.5% month on month. In the first quarter, consumer prices fell by 0.1% in urban areas and maintained the same level in rural areas. Grouped by commodity categories, the prices of food, tobacco and alcohol went up by 0.6% year on year; clothing was down by 0.2%; housing was down by 0.2%; articles and services for daily use were down by 0.1%; transportation and communication fell by 1.4%; education, culture and recreation were up by 0.3%; medical services were up by 0.3%; and other articles and services were down by 1.1%. In terms of food, tobacco and alcohol prices, the price of grain went up by 1.5%, fresh vegetables were up by 4.8%, and pork was down by 12.5%, or down by 18.4% in March with a decline expanded by 3.5 percentage points compared with February. In the first quarter, the core CPI excluding the price of food and energy stayed the same as that of last year.

In the first quarter, the producer prices for industrial products went up by 2.1% year on year. Specifically, the prices in March went up by 4.4% year on year, 2.7 percentage points higher than the growth in February, or up by 1.6% month on month. In the first quarter, the purchasing prices for industrial products went up by 2.8%. Specifically, the prices in March went up by 5.2%, which was 2.8 percentage points higher than the growth in February, or up by 1.8% month on month.

Eighth, the surveyed urban unemployment rate fell and employment remained generally stable. 

In the first quarter, the newly employed people in urban areas numbered 2.97 million. In March, the surveyed urban unemployment rate was 5.3%, down by 0.2 percentage points compared with February and 0.6 percentage points lower than the same period last year. The surveyed unemployment rate of population with local household registration was 5.3% and that of population with non-local household registration was 5.4%. Specifically, the surveyed unemployment rates of the population aged from 16-24 and from 25-29 were 13.6% and 4.8%, respectively. The surveyed urban unemployment rate in 31 major cities was 5.3%, 0.2 percentage points lower than that in February. In March, employees of enterprises worked 46.9 hours per week on average, up by 0.6 hours compared with February. At the end of the first quarter, the number of rural migrant workers totaled 174.05 million. 

Ninth, residents' income continued to rise and the income growth of rural residents outpaced that of urban residents. 

In the first quarter, the per capita disposable income of residents nationwide was 9,730 yuan, a nominal increase of 13.7% year on year, with an average two-year growth of 7.0%, or a real increase of 13.7% year on year after deducting price factors, with an average two-year growth of 4.5%. In terms of permanent residents, the per capita disposable income of urban residents was 13,120 yuan, a nominal increase of 12.2% year on year and a real increase of 12.3%; and the per capita disposable income of rural residents was 5,398 yuan, a nominal increase of 16.3% year on year and a real increase of 16.3%. In terms of income source, nationwide per capita salary income, net operative income, net property income and net income from transfers saw year-on-year growth of 12.4%, 19.5%, 17.0% and 10.7% in nominal terms, respectively. The per capita disposable income of urban residents was 2.43 times that of rural households, 0.09 lower than the ratio of the same period last year. Median per capita disposable income nationwide was 8,014 yuan, an increase of 12.7%. 

Generally speaking, the national economy in the first quarter continued its stable recovery. However, we must be aware that the COVID-19 pandemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities. The foundation for the domestic economic recovery is also yet to be consolidated and the long-standing structural problems remain prominent with new situations and issues arising from development. In the next stage, we must follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and continue to consolidate the foundation of economic stability, to build strength for development and to guarantee basic security requirements. We should maintain the consistency, stability and sustainability of macro policies, deepen reform and opening-up and innovation, keep the economy performing within a reasonable range and promote the quality development of the economy in a solid manner. 

That's all for my introduction. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu for your introduction. The floor is now open for questions. Please identify the media organization you represent before asking your questions.

CCTV:

Ms. Liu, from the data that was just released, we can see that the GDP in the first quarter achieved rapid growth of 18.3%. I would like to ask, what factors contributed to this growth rate? How should we understand the current operation of the overall economy? The first quarter of this year is also the first quarter of the 14th Five-Year Plan (2021-2025) period. What's your comment on China's economic performance for the start of the year? Thank you.

Liu Aihua:

Thank you for your questions. Judging from the main indicators for the first quarter just introduced, it can be said that in this period, despite the tests the pandemic gave rise to in winter and spring and the uncertainties of the external environment, the outcomes we achieved in coordinating the pandemic prevention and control with economic and social development have been consolidated and expanded. On the whole, China's economy has continued to recover steadily, with a positive start. Its characteristics are mainly reflected in five aspects:

First, production demand continues to improve. Because of the low base in the same period last year and the increase in working days as many people stayed put for the Spring Festival, this year's year-on-year growth rate has shown a different trend from previous years. We need to judge the economic situation from multiple angles. Judging from the year-on-year situation, due to the gradual recovery of market demand, the relatively low base of the previous year, and the stay-put celebrations, the main indicators showed double-digit growth. In the first quarter, the GDP increased by 18.3% year-on-year, as did the added value of industrial enterprises above designated size by 24.5%, the total retail sales of consumer goods by 33.9%, fixed asset investment (excluding rural households) by 25.6%, and total imports and exports of goods by 29.2%. The year-on-year growth rate of these indicators was all double-digit. From a quarter-on-quarter perspective, the main indicators continued to grow. In the first quarter, the value added by industrial enterprises above designated size increased by 2.01% from the fourth quarter of the previous year, the total retail sales of consumer goods by 1.86% from the previous quarter, and fixed asset investment by 2.06%. Looking at the average growth rate over the past two years, the GDP in the first quarter increased by an average of 5%, the added value of industrial enterprises above designated size by an average of 6.8%, the total retail sales of consumer goods by an average of 4.2%, the investment in fixed assets by an average of 2.9%, and the average growth rate of the total amount of goods imported and exported was also close to 10%. Therefore, by combining these indicators, it can be said that the overall economy is in stable recovery.

Second, employment and commodity prices are generally stable. In the first quarter, the surveyed unemployment rate in urban areas across the country averaged 5.4%, a year-on-year decrease of 0.4 percentage points. That includes an unemployment rate of 5.3% in March, down 0.6 percentage points year-on-year. In the first quarter, 2.97 million new jobs were created in urban areas across the country, fulfilling 27% of the annual target. In terms of commodity prices, consumer prices in the first quarter remained flat year-on-year. In March, a decline of 0.2% in the previous month turned to an increase of 0.4%, indicating a relatively moderate increase.

Third, we saw a rapid development of new growth drivers. In the first quarter, the high-tech manufacturing industry above designated size grew by 31.2% year-on-year, with an average increase of 12.3% over two years. The added value of the equipment manufacturing industry increased by 39.9% year-on-year, while the two-year average growth rate was 9.7%. These two growth rates are faster than the overall growth rate of all industries above designated size. Investment in the high-tech industry increased by 37.3% year-on-year, with an average growth rate of 9.9% over two years, which was 7 percentage points higher than the total investment. The output of smart low-carbon products has grown rapidly. In the first quarter, the output of new energy vehicles, industrial robots, and microcomputer equipment increased by 3.1 times, 1.1 times, and 73.6% respectively year-on-year, and the average growth rate over the two years exceeded double digits. New business forms and models continue to emerge. New models such as live-streaming e-commerce, online diagnosis and treatment, and telecommuting are developing well, and online and offline integration is speeding up. The online retail sales of physical goods in the first quarter increased by 25.8% year-on-year, with a two-year average increase of 15.4%, accounting for 21.9% of total consumer goods sales.

Fourth, quality and efficiency have been steadily improved. Let's first look at corporate profits. From January to February, the total profits for industrial enterprises above designated size increased by 1.79 times year-on-year, with an average increase of 31.2% over two years; service industry enterprises above designated size turned losses into profits, achieving a total profit of 169 billion yuan, compared to losing money in the same period last year. Residents' income continued to increase. In the first quarter, the national average per capita disposable income increased by 13.7% year-on-year in real terms, with a two-year average growth rate at 4.5%. Meanwhile, the income of rural residents grew faster than that of urban residents. Additionally, energy consumption per unit of GDP continued to decline, with preliminary calculations showing that energy consumption per unit of GDP in the first quarter fell by 3.1% year-on-year.

Fifth, market expectations are stable and improving. In March, China's Manufacturing PMI was 51.9%, an increase of 1.3 percentage points from the previous month, and was within the boom range for 13 consecutive months; the non-manufacturing business activity index was 56.3%, an increase of 4.9 percentage points; the composite PMI output index was 55.3%, an increase of 3.7 percentage points.

Judging from the above five aspects, we can see that the economic recovery in the first quarter of this year continued and that positive factors are accumulating. At the same time, we also understand that the international pandemic is still raging, the international environment is still complex and severe, the foundation for domestic economic recovery is not yet solid, and some service industries and small and micro-enterprises continue to face additional difficulties with their production and operations. In these aspects, we must continue to follow the deployments of the Central Economic Work Conference and the government work report to further increase the efforts to help enterprises out of difficulties; maintain continuity, stability, and sustainability of macroeconomic policies; and promote steady economic recovery. Thank you.

Red Star News:

My question is, judging from the statistics of the first quarter (Q1) of 2021, the consumption sector has rebounded significantly. What's your take on the recovery and in what areas has there been a relatively slow recovery? What measures will be taken to continue to expand consumption in the future? Thanks.

Liu Aihua:

Thanks for your questions. Judging from the data released just now, the total retail of consumer goods surged by 33.9% year on year in Q1, with an average two-year growth of 4.2%. Data show that this year, the consumer market is riding the quarterly recovery momentum from last year, showing a rapid rate of recovery. The three characteristics are as follows: 

First, the retail of goods maintained relatively rapid growth. Sales of goods grew by 30.4% year on year or average two-year growth of 4.8%. For sales of goods by enterprises above the designated size, the year-on-year growth rate in 18 categories of goods exceeded 10%. Specifically, sales of eight categories of goods, including sports, recreational, and communication equipment, increased by an average two-year growth rate of more than 10%.

Second, online sales saw a growing momentum. In Q1, online sales of physical goods reported an average two-year growth of 15.4%, accounting for 21.9% of the total sales of consumer goods.

Third, consumption sectors, such as the catering industry and offline consumption, which were buffered from recovery in the early stages, are now rebounding rapidly. In March, China's catering industry grew at an average two-year rate of 0.9%, which means that the monthly growth rate was higher than that of the same period in 2019 for the first time since 2020. Regarding offline consumption, sales of goods in physical retail shops above the designated size rose by 42.2% year on year in Q1, with an average two-year growth of 4.5%, 0.4 percentage points higher than that of the Jan-Feb period, showing a speedy recovery.

During the Tomb-Sweeping Day holiday, Chinese residents demonstrated a strong consumer demand for tourism and movies. Data from relevant departments shows that the total number of domestic trips topped 102 million during the holiday, recovering to 94.5% of the pre-COVID-19 level. From April 2 to 5, the number of railway passenger journeys rose by 225.8% compared with last year's Tomb-Sweeping Day holiday, recovering to 92.4% of 2019 levels. In the film market, China generated more than 800 million yuan in box office revenue during the three-day Tomb-Sweeping Day holiday, a record high in the same period compared to previous years.

From these numbers, we can see that there has been a rapid recovery in both online and offline sales of goods as well as in sectors such as catering and tourism, which had previously seen a relatively slow recovery and raised many concerns. Influenced by last year's base figures, the year-on-year growth was relatively rapid. With total sales of consumer goods dropping by 19% in Q1 of last year, on the basis of such a low base figure, sales of consumer goods registered a relatively fast growth rate of over 30%. There are also other contributing factors. The improved consumption environment boosted residents' confidence. Residents with an increased income demonstrated their strong consumption capacity. Favorable policies for expanding domestic demand and promoting consumption boosted the sale of major consumer goods. All of these are the reasons behind the rapid growth of the consumer market in Q1.

You just asked about what future trends we're likely to see for the recovery of the consumer market. Generally speaking, since last year, the consumer market has stood the severe test of the pandemic. The advantages of a mega-scale market are obvious and the momentum of upgraded consumption has remained unchanged. In the future, as the economy recovers steadily and residents' income continues to increase, there will be a greater impetus for promoting consumption capacity. China enhanced its responses to COVID-19 and took more targeted measures for pandemic prevention and control, which were also helpful in improving the consumption environment. Policies for expanding domestic demand and promoting consumption are paying off. The building of a new "dual circulation" development pattern that allows the domestic and overseas markets to reinforce each other with the domestic market as the mainstay, is speeding up. All these will support the steady recovery of the consumer market. At the same time, we should notice that China is still facing pressure from imported cases as well as the resurgence of outbreaks at home, which may affect consumer confidence. So we need to continue to coordinate the work of pandemic prevention and control and the economic and social development and improve the urban-rural logistics system to offer more favorable conditions for consumption. We will also work to maintain stability in employment, increase people's income and ensure that relevant policies are implemented in detail to sustain the steady consumption recovery. Thanks.

Shenzhen Special Zone Daily and Dute News: 

According to the statistics released, CPI growth was consistently negative during the first two months of this year, only becoming positive in March for the first time, and thus showed year-on-year flat growth in the first quarter. Analysts predicted that inflation would gradually grow in the next one or two quarters. What do you expect in terms of the CPI trend for the whole year? Thank you.  

Liu Aihua:

Thank you for your question. Just as you mentioned, the overall price levels in the first quarter were steady and the CPI showed flat year-on-year growth. The CPI shifted from a negative growth of 0.2% in February to positive growth of 0.4% in March. The trend of prices is of great concern among the public. Generally speaking, the CPI is currently flat year on year. The growth rate of 0.4% in March was also a mild one. Analyzed structurally, the main factor that led to the positive growth was the price increases of gasoline and diesel, which belong to non-food categories. In March, the prices of both gasoline and diesel increased by 12% year on year. Driven by the price rise of these two energy products, the growth rate of CPI in March turned positive and reached 0.4%. Looking at other commodity categories, price rises, including that of food, were all considered moderate and some prices even fell. Food prices in March declined by 0.7% year on year. As for the price of pork, which is of great concern, decreased by 18.4% in March.  

Looking to the future, what do we forecast in terms of CPI trends for the whole year? First, from the perspective of specific categories, the public is more concerned about the prices of industrial consumer goods, which grew by 1% in March year on year. As for future trends, since we have complete industrial systems, sufficient manufacturing capacity, and effective and forceful macro-control measures in the field, the factors leading to soaring prices do not exist in terms of supply and demand. Second, regarding food prices, the price of pork has played a big role in propelling food price growth over the past two years. However, it has dropped year on year for several months consecutively, falling by 18.4% year on year. Currently, with the implementation of measures to guarantee supply and stabilize prices, our hog production capacity has recovered remarkably. The live hog stocks had grown by 29.5% year on year by the end of the first quarter, an increase of six quarters in a row, indicating a rapid recovery. From this perspective, the price of pork is showing a continuous downward trend. In addition, grain prices were also relatively stable with grain production enjoying a good start this year and winter wheat growing a little better than previous years. From this perspective, food security can be guaranteed. Therefore, whether it's from pork or grain prices, there is little pressure for CPI to grow. Third, as for service prices, since the service industry has recovered steadily both in supply and demand, the price too will restore gradually with the recovery of supply and demand and may show a moderate growth trend. 

Based on the above-mentioned three aspects, including the prices of industrial consumer goods, food, and service, the CPI through the whole year is expected to remain in a moderate range of growth. Thank you.

CNBC:

I have two questions. First, investment in the manufacturing industry during the first quarter increased by 29.8% year-on-year, registering an average two-year decrease of 2%, and consumption in the first quarter exceeded expectations. Will the manufacturing investments impact future economic growth, employment, and consumption, and what are the factors involved? Second, China has promised to strive for peak carbon dioxide emissions by 2030. Will the economy be impacted to achieve this goal? Thank you.

Liu Aihua:

Thank you for your questions. Your first question is a very targeted one. In the process of rapid recovery of overall demand, there are indeed areas that have yet to return to pre-epidemic levels, including investments in the manufacturing sector. An average two-year drop of 2% means that current manufacturing investments are about 96% of before the COVID-19 epidemic and that manufacturing investments haven't returned to pre-epidemic levels. There are many factors involved. On the one hand, this shows that enterprises are facing some difficulties in production and management. They are still recovering and have some concerns regarding investment. On the other hand, enterprises are also observing the overall market, and the factors conducive to the recovery of manufacturing investments are slowly accumulating and increasing. For example, profits for industrial enterprises of designated size in January and February increased by 1.79 times, a significant growth year-on-year, and the average two-year growth reached 31.2%. It can be said that enterprise profits are improving.

This year marks the first year of the 14th Five-Year Plan period (2021-2025), and some major projects are being arranged, providing private enterprises with more and more opportunities to participate. There are many investment opportunities in terms of new infrastructure and new urbanization initiatives and major projects, the transformation of traditional industries, and the upgrading of emerging industries. Therefore, I think, with the overall recovery of the economy and improvement in enterprises' profits, the confidence of enterprises will slowly be enhanced and the room for upgrading of the manufacturing industry remains large. We are still very confident in the recovery of manufacturing investments in the future.

Your second question is about the impact of peak carbon dioxide emissions. In general, promising to strive for peak carbon dioxide emissions by 2030 indicates our confidence in green development. Peaking carbon dioxide emissions will certainly promote energy production and consumption toward clean and low-carbon development, and we are working towards it. Energy consumption per unit GDP decreased by 3.1% in the first quarter, suggesting that we have taken the correct actions in this regard, which is very beneficial to the green development of the economy. Thank you.

Hong Kong Bauhinia Magazine:

The International Monetary Fund (IMF) recently raised its economic growth projection for China in 2021, predicting that its economy will grow by 8.4%. What is the NBS' expectation for China's economic outlook of this year? Thank you.  

Liu Aihua:

Thank you for your question. The IMF upgraded its growth projection for China in 2021, lifting its economic growth to 8.4%, which shows the confidence and expectation of the international community for China's economic development throughout the year. As far as we are concerned, the economy is expected to maintain a consolidated and positive momentum for steady growth, which can be seen in the following three aspects:

First, internal driving forces have been strengthening. Consumption has been improving steadily due to increased personal incomes, improvement in the consumption environment, and implementation of policies. In March, the total sales of social consumer goods increased by 34.2% year on year, 0.4 percentage points higher than that of January and February. The hotel and catering industries, which were affected earlier, have been gradually recovering. March revenue in the catering industry was, for the first time, higher than the level of the same period in 2019, returning to pre-pandemic levels. Moreover, the composition of investment witnessed a continuous improvement in the first quarter, with the average investment in the high-tech industry and the social domain in the past two years up 9.9% and 9.6% respectively. Growth rates in both were close to 10%, higher than the overall investment growth. Such growth was actually not insignificant. Going forward with facilitating factors such as policies, programs, and funding are gradually put in place or implemented, investment is expected to maintain a steady recovery. Additionally, the growth of imports also accelerated in March, jumping 27.7% year on year, a figure that is higher than the growth of exports for the first time this year. This reflects a strong and consolidated recovery of domestic demand. 

Second, supply quality has been improving. Industrial restructuring has been on the rise. According to recently released data, both production and investment in the high-tech industry witnessed a faster growth than average. Additionally, the capacity utilization rate has been increasing, with the national industrial capacity utilization rate reaching 77.2% in the first quarter, up 9.9 percentage points year on year and the highest level in the same period since 2013. The service industry has also seen a steady recovery. The ratio of the added value in the service sector in GDP hit 58.3% in the first quarter, 21.1 percentage points higher than that of the secondary industry. The contribution rate in the service sector in terms of economic growth reached 50.9% and it continued to play its role as the major driving force for growth. Cutting edge services, including information transmission, software and information technology services, grew by 17.1% in the past two years.

Third, market vitality has been unleashed. Macro-policies have been put in place and continue to provide market entities with relief and necessary support. We have improved and implemented tax reduction policies in a bid to help market entities recover and energize them. The number of market entities has seen a rapid increase, with double-digit growth in market entities estblished daily. Enterprise projection has witnessed a good momentum of steady growth. In March, the manufacturing production and business activities expectation index and the non-manufacturing business activities expectation index were both around 60%, maintaining relatively high levels.

The above three aspects, whether in terms of the internal driving forces of the economy, the quality of supply, or market entities that we're concerned about, have all been improving and enhancing. The recovery in these aspects, together with a solid material foundation, complete industrial system, and abundant human resources, all of which are advantages that China has maintained for a long period, will synergize demand and supply, and provide micro-entities with relief. Overall, we are confident that our economic recovery will maintain the current momentum throughout the year, and I think we have the foundation and conditions to achieve a consolidated and positive momentum for steady growth.

Due to the pandemic, as we mentioned earlier, the economic environment is still facing uncertainties and instabilities. We have to be aware of such circumstances, as the foundation for domestic recovery is still yet to solidify and the growth of some enterprises in the service sector as well as among small and micro-businesses remains slow. In the wake of the new situation and problems in economic recovery, we will continue to follow the deployments in the government work report, as well as continue to consolidate the foundation for steady growth, ramp up efforts to achieve progress, and maintain the bottom line for ensuring economic growth to keep economic performance within the proper range throughout the year. 

Thank you.

National Business Daily:

Data for the seventh nationwide population census has not yet been released. When will it be available to the public? Thank you.

Liu Aihua:

Thank you for your attention to the population census. At present, all sectors of society are very concerned about the results of the seventh national census, and we also hope that everyone will receive new data about the country's population as soon as possible. This year, we will add more detailed information based on the sixth national census while significantly increasing the number of census bulletins to offer more details to the public. Therefore, we will make efforts to expedite the release of the final data.

Cover News:

I have two questions. The first is regarding the price of pork. What are your estimations for the future trends of pork prices following the recent dive in prices, which fell back to a dozen yuan for half a kilo? Will the price remain stable as many consumers wish? The second question is about the nationwide employment situation during the first quarter of 2021. More than 9 million students will graduate from colleges this year. What are the employment prospects for them? Thank you.

Liu Aihua:

Thank you for your questions. First, I talked about the price of pork just now. According to the current situation, pig production in China has recovered thanks to a series of supporting measures to stabilize supplies and price. In the first quarter, pig stocks grew 29.5% year on year and kept rising for six consecutive quarters. Large price drops were seen in some regions due to the recovery of pig production. CPI shows that the prices fell 18.4% year on year in March and also decreased month on month. The price will continue to fall as the pork production and supply situation continues to improve.

Your second question regards employment, which is so far generally stable this year. In the first quarter, the surveyed average urban unemployment rate was 5.4%, a decrease of 0.4 percentage point year on year, while the rate for March was 5.3%, falling by 0.6 percentage point year on year. Judging from current unemployment rate data, the current employment status is relatively stable. But just as you said, the overall employment pressure is relatively high this year, and structural imbalance is gradually becoming apparent in the process of economic recovery.

First, the total pressure still exists. The rural migrant labor population reached more than 170 million in the first quarter, 2.46 million fewer than in the same period in 2019. It can be understood that some enterprises in the service sector, particularly small and medium-sized enterprises, are facing more difficulties in production and operations, and are still in the process of recovery. Therefore, the demand for jobs is being directly affected and is indirectly causing the number of migrant workers in urban areas to be lower than before the pandemic. The surveyed unemployment rate for young people aged between 16 and 24 was 13.6% in March, up from a year earlier, indicating that young people still face challenges in employment. This may be because of the large number of young people pouring into the labor market after the Spring Festival and causing frictional unemployment. To some extent, it also signal that the job market is reviving. However, we need time to solve this problem and the job market pressure does indeed remain.

Furthermore, structural issues have also existed. We have learned through the investigation and research process that many enterprises in coastal industrial provinces and major foreign trade provinces report difficulties in recruiting workers. We recently conducted a survey of over 90,000 industrial enterprises above designated size, which showed that approximately 44% of these enterprises reported recruitment difficulties being the biggest problem they face and that this has reached the highest percentage in recent years. During several investigations, many enterprises reported that it is difficult to recruit ordinary workers, skilled workers, and highly-skilled workers on the frontline. These issues have started to appear during the economic recovery.

Therefore, the pressure on both the total amount and the structure of employment exists simultaneously. For the next step, as the economy continues to recover, we will continue to strengthen policies that prioritize employment and increase assistance to groups who have difficulties finding jobs. We will also gradually solve the problems faced by the employment sector by using employment guarantee services and by expanding market-oriented and socialized recruitment channels.

In general, the current employment situation is generally stable. With the overall recovery of the economy, there are still some conditions that need to be met to maintain both the increase of employment demand and the overall stability of the job market throughout the year. Thank you.

China National Radio (CNR):

We noticed that in the first quarter, the total sales of commercial buildings amounted to 3,837.8 billion yuan, up by 88.5% year on year. When coupled with the data released today regarding housing prices in March across 70 large and medium-sized Chinese cities, the overall year-on-year increase also continued. How do you evaluate the current property market situation? What impacts will this increase have on the national economy?

Liu Aihua:

Thank you for your question. Regardless of whether it is investment in or sales of real estate this year, these indicators have been affected by the base figures of the same period last year, and most of the indicators are currently showing double-digit growth. Since the beginning of this year, various regions and departments have been closely following the new situation and new problems, and further adhered to the principle of "houses are used for living, not for speculation." With the goal of stabilizing land prices, housing prices, and expectations, a series of powerful and effective measures have been introduced in a timely manner. 

For the next step, with the increase in the construction of affordable rental housing, the development of the long-term rental housing market will gradually be standardized. A new supply pattern for the real estate market with multi-subject supply, multi-channel guarantee, and simultaneous rental and sales will then gradually take shape, which is conducive to promoting a steady and healthy development of the real estate market throughout the year. Thank you.

21st Century Business Herald:

The market has become more concerned with increasing commodity prices. What is the future trend for commodity prices? China has proposed enhancing regulation of the raw material market. What methods might be adopted in the future? Thank you.

Liu Aihua:

Thank you for your question. Recently, under the impetus of various factors such as loose global liquidity, a recovery in market demand, and short-term supply shortages, and so on, there has been a surge in international commodity prices. According to the data from relevant international organizations, during the first quarter, average international energy prices rose by 35.3% from the previous quarter, while the average non-energy price rose by 11.8%, reaching a relatively high level in recent years.

If we look at the recent price changes, we can see that the prices of some raw materials are growing. PPI grew by 0.3%, 1.7%, and 4.4% year-on-year in January, February, and March, respectively, reversing the previous downward trend lasted for nearly one and a half years. A 4.4% year-on-year increase in March was mainly driven by sectors related to oil and metal, with average prices in the oil and metal-related sectors growing by 11.1% and 17.6% year on year respectively. Generally speaking, the structural increase in PPI is mainly driven by the growing prices of means of production, as their average price went up by 5.8% year on year in March. The price for the means of subsistence in March was stable, up 0.1% year-on-year.

As China integrates deeper into the global economy, the price increase of international commodities may have an impact on the prices of some domestic sectors via trade and investment channels. However, judging from the structural features of the current PPI increase, the impact will mainly affect some upstream industries. The influence on downstream industries is yet to be seen. The relationship between supply and demand is the most fundamental element for price changes. Under the current circumstances with the ongoing economic recovery, the quality and capacity of supply are gradually improving, while demand is still recovering. Seen from these aspects, the prices of China's upstream products have no foundation for long-term growth. Thank you.

China Financial and Economic News:

In recent years, China has made significant efforts to relieve the pressure of market entities. As Premier Li Keqiang said, market entities have provided much support in sustaining positive growth in the domestic economy as well as to meet employment goals in the last year. This year, China continues to adopt multiple measures to serve market entities. What are the major contributions made by vigorous market entities to the stellar economic performance in Q1? How do you see the relationship between the market entities and the country's economic performance? Thank you.

Liu Aihua:

Thank you for your questions. Market entities are the foundation of the market economy. Since last year, China has adopted many macro policies to cut taxes and fees to alleviate the difficulties of market entities and meet their demands. Those policies have been very effective in protecting market entities. From this year's statistics, we can see that the macro-economy is generally recovering and stabilizing, which is supported by the efforts of market entities at the micro-level. Moreover, as production and operations improve, businesses are gaining confidence. We can see this from the many statistics mentioned above, including the production and operations of some micro, small, and medium enterprises (MSMEs). In this year's government work report, China says it will continue to alleviate the difficulties of market entities; ensure continuity, consistency, and sustainability of macro policies; and avoid sharp turns in policy. This shows that China will maintain necessary policy support for market entities to recover. I believe that policy support will not only benefit the macro-economy but also promote higher quality and a higher level of employment.

MSMEs are now seeing better performance in their production and operations. They have also shown stronger confidence. In March, the PMI of small and medium enterprises had returned above the threshold, demonstrating stronger confidence among market entities. As macro policies continue to alleviate their difficulties, market entities, which are supported by their strong resilience, are bound to enjoy better production and operations this year. Thank you.

Shou Xiaoli:

Thank you, Ms. Liu, and friends from the media. This is the end of today's press conference. Goodbye.

Translated and edited by Zhu Bochen, Huang Shan, Xu Xiaoxuan, Wang Qian, Zhang Rui, Zhang Junmian, Cui Can, Mi Xingang, Wang Yanfang, Gong Yingchun, Fan Junmei, Zhang Tingting, Chen Xia, Yan Xiaoqing, Guo Yiming, Li Huiru, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Shen Xiaoming, secretary of the Hainan Provincial Committee of the Communist Party of China and chairman of the Standing Committee of Hainan Provincial People's Congress

Feng Fei, governor of Hainan province

Cong Liang, deputy head of the National Development and Reform Commission (NDRC)

Zou Jiayi, vice minister of finance

Wang Shouwen, vice minister of commerce and deputy China international trade representative

Zhang Jiwen, vice minister of the General Administration of Customs of China (GACC)

Wang Chunying, deputy administrator of the State Administration of Foreign Exchange (SAFE)

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 12, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! Today's press conference is about the construction of the Hainan Free Trade Port (FTP). In accordance with the decision and deployment of General Secretary Xi Jinping and the Central Committee of the Communist Party of China (CPC), the construction of the Hainan FTP is being accelerated, policies are being formulated, and important progress has been achieved. Today, we have invited officials from central government departments and the Hainan provincial government to meet with you and introduce the situation. Speakers present at today's press conference include Shen Xiaoming, secretary of the CPC Hainan Provincial Committee and chairman of the Standing Committee of Hainan Provincial People's Congress; Feng Fei, governor of Hainan province; Cong Liang, deputy head of the National Development and Reform Commission (NDRC); Zou Jiayi, vice minister of finance; Wang Shouwen, vice minister of commerce and deputy China international trade representative; Zhang Jiwen, vice minister of the General Administration of Customs of China (GACC); and Wang Chunying, deputy administrator of the State Administration of Foreign Exchange (SAFE). Now, I will give the floor to Mr. Cong.

Cong Liang:

Ladies and gentlemen, friends from the media, good morning! On April 13, 2018, General Secretary Xi Jinping delivered an important speech at a conference celebrating the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone, announcing the CPC Central Committee's major measures to support Hainan in comprehensively deepening reform and opening up. The Master Plan for the Construction of the Hainan Free Trade Port was officially released on June 1, 2020.

We studied in depth the series of important speeches and instructions of General Secretary Xi Jinping on supporting Hainan in comprehensively deepening reform and opening up and building itself into a free trade port, and developed a good understanding of the significant decision of the CPC Central Committee that building the Hainan FTP will exert a far-reaching impact. The construction of the Hainan FTP is intended to gather high-quality global production factors including capital, knowledge, technology, management, and data, providing an example of high-quality development for the nation. It will promote deeper reform with a higher level of openness so that we can explore new paths and accumulate new experience to speed up the improvement of the socialist market economy system. It will explore the formation of an internationally competitive open system so as to provide an important platform for China to adapt to and actively participate in the formulation of international economic and trade rules at a deeper level.

Over the past three years, especially since the release and implementation of the master plan, the leading group on deepening all-round reform and opening up of Hainan province has been working with the Hainan provincial government and relevant departments to carefully implement the deployment and requirements of the leading group. The system integration and innovation has been put in a prominent place, with focus on trade and investment liberalization and facilitation and the efficient flow of various factors of production. The system integration and collaborative innovation have been highlighted. A series of supporting policies have been put in place to promote Hainan FTP construction. According to preliminary statistics, more than 110 policy documents have been issued and the policy framework of the FTP is taking shape. We have got off to a good start. In general, these policies and systems can be summarized in six aspects.

First, we introduced policies that enable trade and investment to be freer and more convenient. We have established a goods trade system featuring zero tariffs and introduced one negative and two positive lists. The Yangpu Bonded Port Area took the lead in the implementation of an entry and exit management system for goods to facilitate trade, which features opening up the "front line" (the area between the Hainan FTP and other countries and regions outside the customs territory of China) and regulating the "second line" (the area between the Hainan FTP and other areas within the customs territory of China). We have issued the negative list for the access of foreign investment, rolled out special measures to loosen market access, and reduced the number of sectors and industries that are off-limits to both Chinese and foreign investors in its negative list for market access to 27 articles, making investment freer. We have introduced the Catalogue of Encouraged Industries (2020 version) and 17 policy documents to support the development of tourism, the modern service industry, and the high-tech industry, giving more room for development.

Second, we introduced policies that enable financial support to be safer and more convenient. We issued policy documents such as the Opinions on Financial Support for Hainan to Comprehensively Deepen Reform and Opening Up, and promoted the establishment of financial policies and institutional frameworks that are suitable for the Hainan FTP. We have enhanced RMB convertibility and promoted the facilitation of cross-border trade in goods and services as well as new types of international trade settlements. A quota of US$5 billion has been allocated under the Qualified Domestic Limited Partner (QDLP) pilot scheme in Hainan. We also took the lead to launch a pilot reform of overseas listing registration for domestic companies.

Third, we introduced policies that enable the tax preferential policies to be more efficient and targeted. We have formulated and implemented preferential policies including corporate income tax of 15% on encouraged industrial enterprises and personal income tax of 15% for eligible talents. Enterprises established in the Hainan FTP are entitled to corporate tax exemption for income from newly increased overseas direct investment. We have improved the offshore duty-free shopping policy, approved the establishment of six more duty-free shops, and provided "mail delivery" and "deposit offshore, pick up backshore" services. We have introduced policies such as VAT refunds for ships, and a tax rebate at Yangpu Port of Departure, and allowed ships that transit at Yangpu Port of China to refuel with bonded oil. Now, we are formulating tax exemption policies for foreign exhibits during national level exhibitions.

Fourth, we introduced policies that enable the transportation service to be more convenient and open. We have promoted the integration of ports and shipping businesses in the Qiongzhou Strait and built a safer, more efficient, convenient, and cost-effective transportation channel in the Qiongzhou Strait. A convenient and efficient vessel registration procedure has been established, and we are promoting the construction of Yangpu Port of China into an international port of registry. We have innovated cruise and yacht management, supported the construction of Sanya into a home port for international cruise ships, and promoted travel among Hainan, Hong Kong, and Macao by yacht. We introduced the Seventh Freedom traffic rights for air passenger and cargo services and promoted the upgrading of Boao Airport to an international port.

Fifth, we introduced policies that enable the supporting factors to be more effective. We have expanded the scope and channels of visa-free entry for foreigners and carried out a pilot reform of international talent service management. We have issued the high-level talent classification standards (2020), high-level talent identification measures, and management measures for overseas talents. A total of 38 domestic professional qualification examinations are open for overseas personnel and 219 overseas professional qualifications are recognized. International pilot projects on internet data interaction have been carried out. Special channels for international internet data have been set up in nine key parks. Policies such as "standard land" and "rent first and transfer later" have been introduced to guarantee the demand for land in a more flexible and effective way.

Sixth, we introduced more efficient and sophisticated institutions to secure the implementation of the construction of the FTP. The 24th session of the Standing Committee of the 13th National People's Congress reviewed the draft Hainan Free Trade Port Law and solicited opinions from the public. The first batch of legal adjustment matters have all been settled including the introduction of three laws and seven administrative regulations. Special regulations for key parks such as Sanya Yazhou Bay Resort have been issued. We have also innovated institutional mechanisms for ecological civilization. We streamlined administration and introduced systems such as "one stamp of approval." Thirty-six risk prevention and control measures such as anti-smuggling were introduced. The construction and development environment of the Hainan FTP has been significantly improved.

"Spring brings a new beginning and the best is yet to come." With the implementation of Hainan FTP policies and systems, the improvement of the development environment, and the increase of market players, Hainan will surely become a popular destination for investment and business. Thank you all!

Chen Wenjun:

Thank you, Mr. Cong. Next, I will give the floor to Mr. Shen.

Shen Xiaoming:

Ladies and gentlemen, friends from the media:

Good morning, everyone! First of all, I would like to express my sincere gratitude to all sectors of society for their attention and support during the comprehensive deepening of reform and opening up and the construction of a free trade port in Hainan. On April 13, 2018, General Secretary Xi Jinping delivered an important speech at a conference celebrating the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone, giving Hainan a new historical mission to comprehensively deepen reform and opening up, and supporting Hainan to gradually explore and steadily promote the construction of a free trade port with Chinese characteristics. The Master Plan for the Construction of the Hainan Free Trade Port was officially released on June 1, 2020. In the past three years, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, and with the strong support of the central and state departments, other provinces, and all sectors of society, we have put into practice the guiding principles from General Secretary Xi Jinping's important speeches and instructions on Hainan. The vibrant Hainan province has deepened reform and opening up, showing significant changes in ten aspects.

First, our enthusiasm for entrepreneurship has never been higher. We vigorously carried forward the enterprising, pioneering, and hard-working spirit of special economic zones. Each year, we focus on one area and tackle problems centering around the area. We continue to carry out a series of activities such as "making contributions to speed up the construction of the Hainan FTP," encourage government officials to bear the responsibility, and promote the construction of the Hainan FTP to get off to a very good start and develop at a rapid pace.

Second, the quality of economic development has significantly improved. We have made the economic transformation in three aspects, the industrial structure has been optimized, and the quality of development has been considerably enhanced. First, we made the resolve to wean the economy away from the real estate industry. The proportion of industrial investment rose from less than 40% to more than 60%. Second, the economic growth drivers shifted from mainly investment, in particular, real estate and infrastructure investment, to the combination of consumption and investment. Third, we worked to attract various market entities that are in line with the direction of industrial development to participate in the construction of the free trade port. Though under the pressure of real estate regulation and the impact of the epidemic, by great efforts, Hainan's GDP and tax revenue have maintained steady growth, and the main economic indicators are better than the national average. In the first year of the construction of the Hainan FTP, the number of newly established enterprises, the actual use of foreign capital, the number of talents attracted, and offshore duty-free sales have all doubled.

Third, all types of market entities have responded actively. With the implementation of such key policies as the "one negative list and three positive lists for zero tariffs" and the "three lists for lowering market entry threshold," we have added 763,000 market entities in the past three years, exceeding the total number registered entities in the previous 30 years. The utilization of foreign investment has doubled three years in a row, with the three-year aggregate reaching $5.27 billion, a figure more than half the total reported during the previous 30 years combined. For the past three years, central enterprises and their subsidiaries in Hainan saw business revenues grow by more than twentyfold. Additionally, the number of new enterprises grew by 113.7% after the release of the master plan.

Fourth, talent attraction has gained good momentum. With the support of such central ministries and commissions as the Organization Department of the CPC Central Committee as well as other provinces, we have introduced three batches of 285 outstanding officials to work temporarily in Hainan as well as sent four batches of 400 Hainan officials to study in relevant central Party and government departments and developed provinces. Following the instructions of General Secretary Xi Jinping to mobilize the strength of the whole country and attract talents extensively to support the comprehensive deepening of reform in Hainan, we have brought in 233,000 talents for the province since 2018, up by 675% over the preceding period. Among the talents, over 50% were introduced in less than a year after the release of the master plan. Therefore, the first phase of the action plan's goal of attracting 1 million talents to Hainan has been fulfilled. We have also set up one-stop service windows for talents, released administrative measures for overseas personnel to practice and take professional qualification exams in the Hainan FTP, put in place preferential income tax policies for enterprises and individuals, and set salary as the main indicator for evaluating talents. Through these measures, Hainan has become a much better place for talent development.

Fifth, Hainan's environment has seen constant improvement. Hainan's environment is a treasure not only for Hainan people but also for all Chinese people. We have taken solid steps to advance the building of the national pilot zone for ecological progress in Hainan. The pilot program to establish a national tropical rainforest park system has been launched and passed national assessment. The proportion of new energy vehicles owned in Hainan has reached 4.2%, 1.3 times higher than the national level. We have also launched a ban on the production, sale, and use of disposable non-degradable plastic products. Additionally, the use of prefabricated buildings has doubled for three consecutive years; a "zero landfill" model for domestic waste was achieved on the island by the end of last year; the percentage of good air quality days reached 99.5% in 2020 with the average concentration of PM2.5 decreasing to 13 micrograms per cubic meter. The water ecosystems of rivers, lakes, reservoirs, and offshore areas were among the best in China.

Sixth, Hainan's business environment has become increasingly better. By regarding the business environment as the "golden bowl" for the Hainan FTP, we have promoted integrated policy innovation as a key focus and released 12 batches of 116 policy innovation cases. We have strengthened Hainan's one-stop service window for international trade, cutting approval time by 70-80%. Our extremely simple approval procedures are welcomed by all types of market entities.

Seventh, a modern industry landscape is taking shape. We have sped up efforts to form a "3+1" modern industry system (tourism, modern service, high-tech, and high-efficiency tropical agriculture). In terms of tourism and modern services, by making good and full use of the offshore duty-free shopping policy, we have encouraged Chinese consumers to purchase high-end, medical, and educational products and services in Hainan instead of overseas. From May 7 to 10 this year, the first China International Consumer Products Expo will be held in Hainan. In terms of high-tech industry, construction of the Nanfan Agricultural Silicon Valley has made substantial progress; a number of deep-sea projects have been launched at the Yazhou Bay Science City represented by the deep-sea manned submersible Fendouzhe; and China's Mars mission Tianwen-1 and lunar probe Chang'e-5 were launched at the Wenchang International Aerospace City. In the past three years, the number of high-tech enterprises in Hainan has increased by 273%, internet industry revenues have risen by 192% and the supporting role of the high-tech industry has become more and obvious. Regarding high-efficiency tropical agriculture, while we continue to grow rubber trees, betel nut trees, and coconut trees, we have also actively introduced seeds for new varieties of tropical fruit from around the world. Meanwhile, we have encouraged traditional maritime fisheries to move their business onshore or to deep-sea areas and to engage in leisure fishing. The structure of the agricultural industry has been further optimized.

Eighth, risk prevention and control have been forceful and effective. We always believe that "opening up" must be guaranteed through "effective management." The information platform for social management has been put into full use, offering 24-hour monitoring over the flow of people, materials, and capital in offshore areas, along the coastline, and on the island. We have also adopted provisional anti-trafficking regulations to crack down on fraudulent purchases taking advantage of the offshore duty-free shopping policy in accordance with the law.

Ninth, people's sense of gain has steadily been enhanced. We have secured a high-quality victory in the battle against poverty. All five impoverished counties, 600 impoverished villages, and 650,000 registered poor have shaken off poverty. We have accelerated the implementation of a commodity housing program to meet the housing demand of local residents and talents introduced from elsewhere. We have taken forceful steps to curb the rise of consumer prices. We now have 102 schools set up in cooperation with quality educational resources brought in from elsewhere in China. We have also introduced 49 quality medical institutes from other Chinese provinces. With these measures, we have basically achieved the goal of enabling locals to "attend a good school at their doorway" and "get their ailments treated without going to town and their serious illnesses treated without leaving the island."

Tenth, a law on the Hainan FTP is in the making. We are actively cooperating with the National People's Congress (NPC) to make the law so as to give Hainan greater legislative power and power to carry out reforms. Now the NPC Standing Committee has completed the first review and a collection of public opinion.

On April 13 three years ago, General Secretary Xi Jinping made an important speech to welcome worldwide investors to invest in Hainan, participate in the construction of the Hainan FTP, and share China's development opportunities and the fruits of its reforms. Three years on, Hainan has proven by practice that the free trade port is indeed an opportunity for the whole world and we welcome everyone to Hainan. Thank you.

Chen Wenjun:

Thank you, Mr. Shen. Now the floor is open for questions. Please identify your news outlet before asking questions.

CCTV:

General Secretary Xi Jinping has stressed on different occasions that lucid waters and lush mountains are invaluable assets. How will Hainan protect its unique environment as a matter of national importance and ensure that the environment will only improve and never get worse?

Shen Xiaoming:

General Secretary Xi Jinping said during his inspection tour in Hainan that the lucid waters, lush mountains, blue sea, and azure sky are Hainan's strongest advantages and best assets. They are precious objects that can neither be bought nor borrowed. We understand that the lucid waters, lush mountains, blue sea, and azure sky in Hainan are not only precious for Hainan people but also for all Chinese people. Therefore, to best protect Hainan's unique environment is a matter of national importance and one that we must be fully aware of.

To ensure that the environment will only get better and never get worse is something we are resolved to accomplish and these efforts are being led by the construction of the national pilot zone for ecological progress in Hainan. To protect the environment, we will uphold two important concepts. First, we must simultaneously improve the "three environments" (ecological environment, policy environment, and business environment) to support the building of the free trade port. Second, in the development of the free trade port, all other issues must give way to environmental protection. If any issue conflicts with environmental protection, the latter prevails. In other words, we will by no means seek development at the cost of the environment.

Guided by the two concepts, we will mainly focus on three tasks. First, by setting a goal: that Hainan's environment will rank among the best in the world by 2035. Second, we must prioritize governance. We have strengthened governance in the process of rectifying the problems found by the central environmental supervision task force and the national marine supervision task force. We won't rest until these problems are thoroughly resolved. Third, we will launch flagship projects to lead environmental protection efforts. After General Secretary Xi Jinping's April 13 speech, the CPC Hainan Provincial Committee and the Hainan provincial government have planned a number of flagship environmental projects. For example, we have designated 4,400 square kilometers in central Hainan island as a national tropical rainforest park to protect China's only tropical rainforest. We have made a new energy development plan which aims to raise the share of clean energy in Hainan's installed power capacity to about 85% by 2030, a very advanced level even around the world. We also announced that Hainan will no longer sell petrol-fueled vehicles after 2030 and instead promote clean energy vehicles. We have also adopted a ban on disposable non-degradable plastic products which is now gradually being expanded across the island. Additionally, we have vigorously promoted the use of prefabricated buildings and their number has doubled for three years in a row.

Hainan's environment is good. This is a feeling shared by everyone who has been to Hainan. However, we in Hainan are fully aware that a good environment does not mean good environmental protection. Therefore, we need to keep working hard and strive to leave the lucid waters, lush mountains, blue sea, azure sky, and a gradually mature free trade port to the generations to come. That's all I'd like to share on this question. Thank you.

China Reform Daily:

Mr. Cong, in your opening remarks, you introduced the development of policy framework in the Hainan FTP. As one of the main leading departments, what has the NDRC done in this regard? Can you elaborate a little? Thank you.

Cong Liang:

Thank you for your question. Just now, I gave a general overview of the development of the policy framework in the Hainan FTP, which is the result of the joint efforts by all departments and Hainan province. Since 2020, the NDRC has fully grasped and put into practice the principles from General Secretary Xi Jinping's major addresses and instructions, and implemented the decisions and arrangements of the CPC Central Committee and the State Council. We have innovated methods, fully performed our duties, and lost no time in making important policies and advancing major projects. Alongside Hainan province and other departments, we have jointly promoted the construction of the policy framework in the Hainan FTP.

The NDRC's work can be summarized as "three specials and one major." We have rolled out three special policies for the Hainan FTP, and boosted the construction of major projects in the Hainan FTP.

The first special policy is the Special Administrative Measures for the Access of Foreign Investment in Hainan Free Trade Port (Negative List). To further increase the liberalization and facilitation of investment in the Hainan FTP, accelerate the forming of globally competitive opening-up systems and policies, and turn the Hainan FTP into a flagbearer and window for opening-up in the new era, on Dec. 31, 2020, the NDRC and the Ministry of Commerce released the Special Administrative Measures for the Access of Foreign Investment in Hainan Free Trade Port (Negative List) (2020 Edition). Compared with the negative list with 30 restricted items for pilot free trade zones released in 2020, the negative list for the Hainan FTP was shortened to 27 items. The prohibitions and restrictions for some other items were also reduced, aiming at supporting the Hainan FTP to take a lead in further opening-up. Going forward, according to the requirements of the master plan, we will continue to shorten the negative list, and gradually allow more convenient and freer investment in Hainan.

The second special policy is the Catalogue of Encouraged Industries of Hainan FTP. In order to guide the industries in the Hainan FTP to develop in the right direction, and promote the clustering of domestic and international high-quality enterprises, on Jan. 27, 2021, the NDRC, the Ministry of Finance and the State Taxation Administration jointly introduced the Catalogue of Encouraged Industries of Hainan FTP (2020 Edition). Based on the current National Industrial Catalogue, it has added 14 more major categories and 143 sub-industries, basically covering all major industries and sectors in the Hainan FTP. The catalogue not only includes a wide range of items, but also highlights the development needs of the tourism industry, the modern service industry and the high technology industry. Next, we will make appropriate adjustments to the catalogue according to the needs in the construction of the Hainan FTP.

The third special policy concerns the special measures to ease market access in the Hainan FTP. In order to better leverage the distinct advantages of the Hainan FTP, which is positioned to experiment with the highest level of policies, and to explore a market access policy system, a supervision model and a governance institution with more flexibility and efficiency, several days ago, the NDRC and the Ministry of Finance jointly rolled out a series of special measures. Focusing on the functions of the Hainan FTP, we have proposed 22 measures for special market access that will deliver greater benefits in sectors including medical care, finance, culture and education. We will effectively promote the concentration of high-quality production factors, and speed up the fostering of new advantages with Hainan characteristics in cooperation and competition.

The "one major" refers to advancing the construction of major projects in the Hainan FTP. We have studied and made an action plan for the construction of major projects in the Hainan FTP, and established a reservation system for major projects. We have released the Regulations on the Management of Projects within Central Government Budget under Major Regional Development Strategies (Advancing Overall Reform and Opening-up in Hainan), and allocated 10 billion yuan to support the software and hardware infrastructure construction in the Hainan FTP. We have issued the Smart Hainan Plan and the Plan for Hainan to Build a Modern Comprehensive Transport System, so as to advance the construction of major projects in new-type infrastructure, transport and energy. We have included Hainan into the pilot project of the real estate investment trusts in infrastructure — the REITs pilot project — in a bid to support Hainan in vitalizing its existing assets, and expand financing channels in constructing major projects.

CRNTT:

Talent is the crucial foundation for constructing the Hainan FTP. Since June 1, 2020, when the CPC Central Committee and the State Council published the Master Plan for the Construction of the Hainan Free Trade Port, relevant departments have introduced a range of policies to attract talent to Hainan. How has the implementation progressed? And what measures will be taken to enrich the talent team in Hainan?

Shen Xiaoming:

As General Secretary Xi Jinping proposed at the celebration of the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone on April 13, 2018, deepening overall reform and opening-up in Hainan is a major national strategy, which requires rallying support from the entire country as well as global talented people. We must realize that in deepening Hainan's reform and opening-up, and constructing the FTP, talent remains the top priority resource. Since April 13, 2018, the central government and relevant departments have fully supported Hainan in pooling talent. Hainan has rolled out a series of policies concerning talent, and has preliminarily founded a talent-related policy system that is scientific and effective. I mentioned earlier that during the last three years since April 13, 2018, Hainan has introduced 233,000 professionals. The number increased 675% over 2018. What delighted us more is that over half of these 233,000 professionals were introduced in less than a year since the master plan was released. That is to say, the speed of introducing talent has increased.

Next, as you mentioned, we will further enlarge the talent team in Hainan. However, as I always tell my colleagues in Hainan, it is important to both introduce talent as well as foster talent. We need both talent introduced from outside and local talent. The master plan runs until 2050, and I often feel that we are lucky to be the first generation in its construction. Where is the last generation or those who will make the final sprint in the campaign? Perhaps they are still in kindergarten. As such, developing education in Hainan is of strategic significance in expanding the talent team there. Thank you.

CNR:

We have noticed that the Master Plan for the Construction of the Hainan Free Trade Port mentions gradually opening up and achieving initial results before 2025. The Ministry of Finance has released a series of supporting policies. What role have these supporting policies played? Thank you.

Zou Jiayi:

Thank you for your question. The master plan has proposed an arrangement for fiscal and tax policies. That is, to implement a simplified tax system with zero tariffs and low tax rates by phrases. Before launching island-wide special customs clearance operations, we will focus on zero tariffs and low tax rates. Specifically, we will exempt tariffs for some imported goods, and implement low income tax rates for enterprises and individuals that meet relevant requirements. Meanwhile, we will implement value-added tax policy for relevant shipping vessels. In total, 12 taxation policies are involved.

In the past year, nine of the 12 policies were introduced as they matured. The first was the offshore duty-free shopping policy. The second was the zero-tariff policy for raw and auxiliary materials. The third was the zero-tariff policy for vehicles and yachts. The fourth was the zero-tariff policy for production equipment imported by enterprises for self-use. The fifth was the preferential policy for corporate income tax. The sixth was the preferential policy of individual income tax for high-end and urgently-needed professionals. The seventh was the value-added tax policy for international shipping vessels. The eighth was the tax refund policy for ports of departure. The ninth was the policy for domestic ships with both domestic and foreign trade goods on board, allowing them to refuel with bonded fuel oil required for the voyage, or claim tax refund if they refuel with locally produced fuel oil for the voyage. These nine policies have contributed to the early results in constructing the Hainan FTP.

The policies will play roles in four aspects. First, they will support the construction of an international tourism consumption center. Offshore duty-free shopping policies have been improved. The duty-free shopping quota has been raised to 100,000 yuan per person per year. The categories of duty-free goods have been expanded to 45. The duty-free limit for a single product and the single-purchase quantity limit on most goods have been cancelled. That means, within the 100,000-yuan quota per year, people can buy a watch, or multiple lower-priced items.

Under most circumstances, there is no limit on the quantity of items that can be bought in a single purchase, except for a small number of goods such as cosmetics, cell phones and alcohol. Meanwhile, to make it more convenient for tourists to purchase goods, besides picking up purchases in the restricted areas of airports, train stations and ports, there are two more collection methods, namely, express delivery and pickup after returning to the island.

Pickup after returning to the island is designed for Hainan residents who depart for business or travel, allowing them to collect their duty-free purchases after returning to the island. Express delivery is for the convenience of tourists, so that they don't have to carry the goods themselves, but can instead leave an address and have the shop mail the goods to their home. In addition, six offshore duty-free stores have been added — three in Haikou and three in Sanya. With the four previous stores, there are now a total of 10 offshore duty-free stores in Hainan.

Second, optimization and upgrade of the industrial structure will be supported. We have issued a zero-tariff policy for raw materials, transportation and yachts, and self-used production equipment, as well as preferential income tax policy for enterprises. The zero-tariff policy for raw and auxiliary materials is applied to positive list management, which means raw and auxiliary materials in the positive list that are imported into and used for production within the island, or consumed in the processing trade and service trade of which final products would be exported to overseas are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for transportation and yachts is also applied to the positive list management, which means vessels, aircrafts, vehicles, yachts and other transportation in the import manifest used for transport and tourism in the island are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for self-used production equipment is applied to negative list management, which means equipment excluded from the negative list, or not belonging to commodities that laws, regulations and relevant provisions have clarified are not exempted from tax and not allowed to import, are exempted from custom duties, import value-added tax and consumption tax. The preferential income tax policy for enterprises refers to reducing the enterprise income tax of encouraged industries registered and substantively operated in Hainan FTP by 15%. Income from newly increased overseas direct investment of enterprises related to tourism, the modern service industry and high and new technology in Hainan FTP will be exempted from income tax. Qualified capital expenditure of enterprises may apply for a one-time pretax deduction or accelerated depreciation and amortization in the current period when the expenditure occurs.

Third, we will support the introduction of high-caliber, high-tech, and urgently-needed talents. Just now, a Hong Kong journalist asked a question about the talent introduction policy in Hainan, which also involves fiscal policy support. We have issued a preferential policy for individual income tax. For high-end and urgently-needed talents working in Hainan FTP, the portion exceeding 15% of the actual tax burden of their individual income tax will be exempted.

Forth, the construction of an international shipping hub for the new land-sea transit routes in the western region will be supported. We have issued three policies in this area. First, added-value tax will be rebated when domestic ship building enterprises sell qualified ships to transportation enterprises. Second, domestic ships using Yangpu Port as their transit port and engaging in domestic and foreign trade by the same ship are allowed to refuel with bonded oil required for the voyage at Yangpu Port. Export tax will be rebated when ships refuel locally-produced oil required for the voyage at Yangpu Port. Third, port of departure tax will be rebated for container goods that have been declared and exported by export enterprises at customs at the port of departure; taken direct routes to or stopped at designated ports during waterway custom transfer; and that are departing China from Yangpu Port in Hainan. Thank you.

ITAR-TASS:

I'd like to ask a question about cooperation between Hainan FTP and Russia. Recently, Hainan FTP issued policies on attracting foreign investment. What are the fields with the greatest potential for cooperation between Hainan FTP and Russia? What are the most important advantages of the bilateral cooperation? Thank you.

Feng Fei:

Thanks for your concern about the construction of Hainan FTP. In the past three years, the explosive growth in foreign investment has become a highlight in the construction of Hainan FTP. Hainan has become a "new favored place" for global investment. Specifically, I'd like to explain this through three areas in which we've witnessed exponential growth. First, Hainan's actual use of foreign capital has doubled annually for three years in a row, with the aggregate exceeding half of what the island province had accumulated over 30 years since it became a special economic zone in 1988. Second, the number of foreign investment entities has multiplied. The number of newly established foreign-invested companies in Hainan reached 1,005 last year, surpassing the 1,000 mark and nearing three times that of 2019. It was not easy to achieve such results since last year was severely impacted by the pandemic. Third, the number of sources of foreign investment grew exponentially. At present, more than 80 countries and regions including Russia have invested in Hainan.

Why has Hainan become a "new favored place" for global investment? I would use two points to sum up its favorable policies. First, Hainan has the lowest number of items on its foreign investment negative list. There are 33 items on the national list, 30 on the list of free trade zones, and 27 on the list of Hainan. Second, Hainan has the lowest tax and that might be what foreign-invested companies care most about. Take corporate income tax as an example. Companies in industries encouraged by Hainan enjoy a preferential corporate income tax rate of 15%. High-end talents pay income tax no higher than 15% of their gross income. Those two policies are exclusive to Hainan.

Regarding cooperation with Russia, we have considerations in two areas. First, we will deepen tourism cooperation. In 2019, 330,000 Russian travelers visited Hainan, which means among every four foreign visitors, one was from Russia. After the pandemic, we hope the flights between Russia and Hainan will soon be resumed, and more Russian friends will visit Hainan. Meanwhile, the fitness and elderly-care industry and shopping will bring new experiences for Russian travelers. Second, we will expand cooperation with Russia in the areas of culture, sport and technology, but especially culture. Russia is famous for its rich and colorful culture. Take art performances as an example. China's central government has approved foreign investment to establish commercial performance brokerage firms in Hainan. We hope to deepen bilateral cooperation in this field, and achieve mutual benefit and win-win results. Thank you.

China News Service:

To promote trade liberalization and facilitation is always the key point for the construction of Hainan FTP. What has the Ministry of Commerce (MOC) done in this area? What are the latest considerations and plans for the future? Thank you.

Wang Shouwen:

Thanks for your question. Trade liberalization and facilitation is a common feature of international advanced free trade ports, and also a key point for the construction of Hainan FTP. On June 1, 2020, the CPC Central Committee and the State Council released the Master Plan for the Construction of the Hainan Free Trade Port, which systematically designed the policies and regulations in the field of foreign trade, and clarified the goals expected to be achieved by 2025 and step-by-step arrangements. Since the construction of Hainan FTP began, the MOC has actively implemented the master plan and the relevant institutional arrangements of trade policies. We have already carried out the following measures.

First, we have studied and drafted the negative list of cross-border service trade for Hainan FTP. Currently, the drafting of the list has been completed and the corresponding procedures are under way.

Second, we drafted and reported to the State Council to release relevant replies on comprehensively deepening trials for the innovative development of service trade last August. A three-year trial will be launched in Hainan and other places to deeply explore new systems for the innovative development of service trade.

Third, the MOC and Hainan provincial government will co-hold the first China International Consumer Products Expo on May 7-10, which is now in intensive preparation.

Moreover, the MOC and other relevant departments are busy working to promote policy adjustment for duty-free shopping on offshore islands, the zero-tariff list for several imported goods, and the supervisory measures of duty-free shopping for goods with 30% added-value at Yangpu Bonded Port. Mr. Zou gave us a detailed introduction about this area just now. I'd like to emphasize that in order to implement the master plan, especially based on the new development stage and new development philosophy, and in line with the needs of the construction of Hainan FTP, the MOC and 19 other relevant departments have proposed a number of measures to advance trade liberalization and facilitation in Hainan FTP. The measures have been authorized by the State Council and formed into documents. Next, the MOC and 19 other relevant departments will release the documents, which contain 28 items of policies and measures relating to liberalization and facilitation of trade in goods and service. You can learn more specific content after its release, and here I'd like to briefly introduce these 28 items.

First, we will implement specific tasks of the Master Plan for the Construction of the Hainan Free Trade Port. For example, in the area of trade in goods, we will adhere to the principle of free flow through the "first line" and efficient control at the "second line." (The "first line" refers to the demarcation line between Hainan FTP and other countries and overseas regions while the "second line" refers to the dividing line between Hainan FTP and other regions on the Chinese mainland.) We will allow certain regions to relax their control of import and export qualifications for and quantities of commodities such as crude oil, refined oil and sugar, and cancel their licensing systems for imports such as mechanical and electrical products. In the area of trade in services, in accordance with the requirement of "allowing both access and operation," foreign institutions are explicitly allowed to independently hold foreign-related economic and technological exhibitions with names other than "China," "Chinese," or "national." Business activities related to technological import and export will no longer need to record registration for foreign trade operators. We are exploring ways to cancel examination and permission for auction enterprises and records of commercial franchise.

Second, we will serve the construction needs of the Hainan FTP. The supporting measures will include: delegating refueling permission of bonded bunker fuel for ships engaged on international voyages; greenlighting Hainan for the export of secondhand vehicles; piloting accreditation of trade in goods-related commodities, management and service certification bodies; encouraging Hainan to develop new trade patterns such as offshore global trade, digital, technological and cultural trade, as well as the exhibition economy; welcoming the establishment of trade bases of cultural goods; vigorously innovating models of international cooperation in the trade in service sector; and expanding trade by focusing on market entities, so as to build Hainan into a new global and regional offshore trade center as well as an exhibition center.

Third, we will optimize supporting policies in the trade sector. The following measures will be taken: improving risk warning and rapid response supervision capabilities for the quality and security of imports and exports; strengthening innovation of the customs supervision model; implementing multi-level approval models; facilitating prescribed examination procedures; supporting Hainan to participate in establishing recommended national, regional or group standards; establishing work stations to deal with trade frictions and mechanisms for trade adjustment and assistance; and improving the statistical monitoring system and other measures in a bid to realize integrated innovation in trade systems.

Next, the MOC will work with relevant departments to expedite trade liberalization and facilitation at the Hainan FTP. Thank you.

Guangming Daily:

With regards to China's efforts in fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, what is the positioning of the Hainan FTP, and how will it play its role? Thank you.

Shen Xiaoming:

I will summarize the two questions. The first is regarding the positioning of the Hainan FTP within the new development paradigm, and the second involves how it will play the role. I will start by answering the first question.

We have positioned the Hainan FTP at the intersection between domestic and international circulations. If dual circulation is shaped like the figure "8," Hainan province is situated right at the point the two loops intersect. Some may ask why. There are three reasons: First, at an institutional level, after the island-wide customs clearance operation in 2025, it will become a special region for importing and exporting commodities. Second, at a policy level, the main policy aims to facilitate free trade and investment, and almost all its policies are made for fostering international investment and making free trade more convenient. Therefore, the policy puts Hainan at an intersection linking domestic and international circulations. Third, with its special geographical location, Hainan connects the world's two most vibrant markets — the Chinese mainland and Southeast Asia — making it a natural intersection of the "dual circulations." Based on these three reasons, I think Hainan's positioning is highly important and significant in China's new development paradigm.

As for how the Hainan FTP will play its role, our consideration is as follows: it will follow the most advanced international trading standards, and will make full use of its investment and trade facilitation policies to attract talents, resources and capital in the process of "dual circulation." We hope the convergence will go beyond the material level to cause a knock-on effect, with macro and long-term significance. For instance, in the current context, COVID-19 is still raging around the world, hindering the easy flow of people, goods and capital globally. However, we can seize the opportunity against such a background to boost consumption at home, mainly in the following three aspects: first, the pandemic has stopped many consumers who wanted to buy luxury and high-end goods abroad. We adjusted our offshore duty free rules in a timely manner under the support of such departments as the Ministry of Finance, the GACC, the State Administration of Taxation, as well as the NDRC. The total amount of offshore duty-free sales last year was double that in 2019, reaching 30 billion yuan, and we expect the amount to exceed 60 billion yuan this year. This is the first aspect we will work on: bringing consumption back from abroad.

Our second effort aims to bring medical services back from abroad. This refers to patients who intended to travel overseas for medical treatment but couldn't, like those with cancer, after receiving the first period of targeted therapy abroad, they couldn't continue with the second phase treatment overseas as the pandemic halted international travel. The Boao Hope City in Hainan stepped in. Here patients can legally access new foreign drugs in Hainan that cannot be found in the domestic market. This explains what bringing back medical services is.

Our third effort aims to provide quality educational resources. Since the outbreak of COVID-19, some Chinese students have been unable to go abroad to study and their parents are worried about their children in case another pandemic hits in the future. Can students access high-quality international or even top-quality educational resources? Overseas universities which boast large numbers of Chinese students are also seeking ways of mitigating against similar emergencies and hope to open branches in China. Hainan is targeted to become an island for international education innovation. Through the introduction of top education resources from abroad, the domestic need for quality education can be well addressed. At present, Harrow International School is now open in Haikou and will followed by others this fall in Lingshui Li'An International Education Innovation Pilot Zone, while a large number of other projects are also underway.

We have taken the initial steps in promoting bringing back consumption. Compared with the 1 trillion yuan overseas consumption on commodities, the 800,000 patients receiving treatment abroad, and the 800,000 Chinese students studying overseas, the proportion is not high. However, its future has received much attention from market players. What I said is only one example of how the Hainan FTP can play its role, and there are many more examples. Thank you.

Hong Kong Economic Herald:

My question is for Mr. Shen. I remember a previous report saying that in terms of building an international business environment, Hainan was inefficient in providing professional services, as it lacked professional service institutions. And, it was not very competitive in attracting foreign investment. What has changed? What shortcomings does Hainan need to address? And how much does Hainan need to do in order to achieve a more ideal business environment?

Shen Xiaoming:

Mr. Feng will answer this question.

Feng Fei:

Thank you for paying attention to Hainan's business environment. Mr. Shen just mentioned a very important point, which is that business environment, ecological environment, and policy environment should become the core competitiveness of Hainan. We will strive to combine these three environments to optimize Hainan's development environment. In General Secretary Xi Jinping's important speech on April 13, he urged Hainan to expedite plans to foster a law-based, international, and convenient business environment as well as a fair, open, unified, and efficient market environment. These are also the ways in which Hainan can strive to improve its business environment.

In the Master Plan for the Construction of the Hainan Free Trade Port, we clarified our development goals in different stages. By 2025, we will have built an overall first-rate business environment in China. By 2035, the business environment will be further improved. Over the past years, Hainan has made great efforts to improve its business environment and fostered many renowned, national brands. Particularly, we have paid attention to the integrated and systematic innovation. For example, we led the country in implementing reforms of combining different types of plans into a single plan within the province. We have also regulated the use of all territorial space in a unified way, reflecting the need for a single blueprint to lay out all projects, a single form for application materials, and a single system for approval and inspection services. These efforts effectively solved problems that previously arose from excessive planning and met the needs for land, sea, and forest s of construction projects. For example, we promoted minimum approvals in key parks of Hainan Pilot Free Trade Zone, the replacement of project initiation approval with planning approval, and the replacement of single project assessment with regional assessment. We cut the number of approval items from 70 to four and the time needed for approval by over 80%. We also updated the single-window system for international trade, cutting the time needed for clearance to half the time needed three years ago. We continue to carry out innovative approaches for easier clearance such as "internet + appointments," post-release duty payments, and consolidated duty collections. Additionally, the "release after inspection" model allows imported products to pass through clearance if they meet inspection requirements. Another example is the "one seal approval" model, which allows the transfer of around 300 administrative items in a centralized, unified way. Finally, companies and individuals can now access government services via a single office, without turning to multiple offices.

Generally speaking, Hainan has achieved great progress in improving its business environment. We can see from Mr. Shen's examples of market entities, companies, and foreign investment, that Hainan's favorable business environment is widely recognized by companies. Objectively speaking, there is still room for improvement when compared to the master plan, specifically concerning the requirements of creating a market-oriented, law-based, and internationalized business environment, and other developed provinces and cities in the country.

Therefore, we will ramp up efforts to further optimize the business environment in three aspects, which are as follows. First, we will set goals for guiding the reform of the business environment. For example, we proposed improvements to government services by letting people access them in any region within the province and complete the process without the need for a second trip. Second, we will make quantitative goals in line with the standards of the World Bank, making our annual work quantified and specified across cities and provinces. Third, we will build a mechanism for assessing the business environment that enables the market to play its decisive role and allows participation from all companies and customers.

Again, a law-based environment is the best business environment as well as the most stable and predictable. Mr. Shen just discussed how the Hainan Free Trade Port Law will be implemented. This year, we will accelerate the formulation of laws and regulations on fair competition, social credit, and business registration and deregistration. In the meantime, we will push forward the building of a law-based government in all respects and regulate activities between the government and market in a law-based manner and through law-based procedures and approaches, protecting the legitimate rights and interests of investors.

I also want to take the initiative to respond to the recent incident which happened in Sanya involving tourists who recently complained that the sea urchin steamed eggs that they ordered at a restaurant did not contain any sea urchins. The Hainan Provincial Committee of the CPC and the Hainan provincial government attach great importance to the order of the tourism market and over the years have taken a series of strict measures in three aspects, including changes to the supervision system, complaint mechanisms, and special campaigns. We will carry out a thorough investigation, address the matter in line with the law and respond to public concerns in a timely manner. Thank you.

Red Star News:

Since July 1, 2020, new policies on duty-free shopping for travelers leaving Hainan Island have aroused a great deal of public interest, increasing the public's enthusiasm for tourism and shopping in Hainan. Since Feb 2, 2021, two new pick-up methods have been added: delivery by post and pick-up on the island. This has facilitated the shopping experience for travelers but has also further increased the regulatory pressure on customs. What are the considerations in preventing the purchase and resale of duty-free goods on the mainland (known as "tao daigou")? Thank you.

Zhang Jiwen:

Thank you for your question. The GACC resolutely implements the instructions given by General Secretary Xi Jinping on the construction of the Hainan FTP and the decisions and plans made by the CPC Central Committee and the State Council. We are actively exercising our functions, strengthening supervision, and improving our service to fully support the construction of the Hainan FTP.

Policies on duty-free shopping for travelers leaving Hainan Island is one of the major achievements in the initial stage of the construction of the Hainan FTP. Starting from July 1 of last year, Hainan increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan, expanding the range of duty-free goods from 38 to 45 categories. To ensure the smooth implementation of these new policies, customs are actively participating in timely policy creation and the adjustment of clearance procedures according to the new annual quota and categories. We also created targeted regulations based on their supervision and updated the customs' information management system. All of these efforts effectively guaranteed the implementation of new policies.

Implementation of new policies has greatly promoted Hainan to build itself into an international tourism consumption center and boosted growth in Hainan's foreign trade. Data from customs show that, between July 1, 2020, and April 6, 2021, Hainan reported duty-free sales of 34.7 billion yuan, up 244% from the same period last year. Duty-free shops in Hainan received 4.96 million customers and sold 43.26 million products during the same period, up 215% and 101% year on year, respectively. It is obvious that stimulus in consumption was brought about by preferential policies. On Feb 2, 2021, to make it more convenient for travelers to shop and maximize policy effects, methods were added for duty-free shoppers leaving Hainan Island, allowing them to pick up goods through delivery by post and after their return to Hainan Island. Customs attaches great importance to the new policies and on Feb 3, we published the Announcement on Issuing the Supervisory Requirements for the Methods of Picking up Goods through Delivery by Post and after Return to Hainan Island for the Duty-free Shopping of Travelers Leaving Hainan Island, clarifying the specific requirements for supervision. In the meantime, we will work actively to publicize and explain the supervision methods of customs. From Feb 3 to April 6, Hainan's offshore duty-free companies reported 400-million-yuan's worth in duty-free shopping sales via delivery by post, involving 100,000 customers and 530,000 products. They also accepted applications from the island's residents to pick up products after return to Hainan island, involving 2,216 duty-free products worth 2.62 million yuan purchased by 406 travelers.

We continue to improve and update the regulatory models and facilitate our services. In the meantime, we will crack down on illegal smuggling activities, such as "tao daigou," which exploit duty-free shopping policies. Customs has always taken strict measures to crack down on such practices by solving major crimes and dismantling smuggling gangs and networks. This has helped to ensure the stable and orderly implementation of policies for duty-free shopping and protected the legitimate rights and interests of most travelers.

In the past two years or so, Haikou Customs, under the guidance of the GACC, has carried out 11 rounds of special campaigns against smuggling through offshore duty-free channels. A total of 66 smuggling gangs were eliminated, involving cases worth about 200 million yuan. From July 2020 to now, more than 8,000 people who violated offshore duty-free shopping regulations were banned from enjoying the duty-free policies for three years. At the same time, in order to fully leverage the advantages of regional collaboration, Zhanjiang Customs and Haikou Customs have carried out joint operations against smuggling through offshore duty-free channels since January. So far, four rounds of joint campaigns against smuggling activities have been carried out and five criminal cases have been filed, involving illegal goods worth 26.84 million yuan.

In the next step, by adhering to the premise that opening-up can only serve its purpose when supported with enhanced oversight, customs will continue to make targeted crackdowns on various smuggling crimes during the construction of the Hainan FTP. Through these measures, we will ensure that the decisions and deployments of the CPC Central Committee and the State Council can be implemented to support the healthy development of the Hainan FTP. Thank you.

Cover News:

Since the release of the master plan, how are the relevant policies issued by the Ministry of Finance working out? What are your considerations in expanding the range of duty-free products in the future? Thank you.

Zou Jiayi:

Thank you for your questions. I just introduced that nine of the 12 fiscal and tax policies have so far been implemented. These nine policies, which have been in place for a significant amount of time, have achieved remarkable progress so far. The other policies, which were implemented more recently, are so far paying off and their effects will become clearer with time.

The policies yielding remarkable results include the offshore duty-free policy we repeatedly mentioned just now. The policy took effect on July 1 last year and duty-free sales had already exceeded 30 billion yuan by the end of March, registering a growth rate more than double that of the previous year. Sales under the supervision of the General Administration of Customs, as Mr. Zhang Jiwen just described, reached 34.7 billion yuan, with both the number of shopping trips and the quota for per capita shopping increasing significantly year-on-year. In June last year, I also introduced Hainan's offshore duty-free policy. At that time, journalists said that I was live-streaming e-commerce for Hainan. Now it seems that they no longer need me to do so. As Mr. Shen Xiaoming said, sales of offshore duty-free goods are expected to exceed 60 billion yuan this year. As the Chinese saying goes: peaches and plums, without speaking, form a path under them. The policy has indeed played a role in attracting visitors to Hainan, which stimulated the vitality of local tourism, the consumption market and promoted the development of related industries. In addition, the preferential policies for enterprise income tax and individual income tax that have been in place since Jan 1, 2020, reduced the tax burden of enterprises and attracted high-end talents to Hainan when they were in short supply. The number of new market players in Hainan has increased rapidly and all kinds of talents have continued to come to Hainan.

Additionally, policies that have been implemented for a relatively short time are slowly seeing benefits. For example, since the zero-tariff policies for raw and auxiliary materials, vehicles and yachts, and equipment for enterprises' use were adopted starting last November, the value of goods from these preferential policies has reached nearly 900 million yuan, while tax exemptions have exceeded 100 million yuan, effectively reducing the import cost of enterprises. I believe, with the steady implementation of these policies, more market players will benefit and the positive effects of these policies will further be unleashed.

On the whole, the adoption of the above fiscal and tax policies has delivered notable progress, boosted the confidence across all sectors involved in the construction of the Hainan FTP, and attracted more people, logistics, and funds to Hainan, laying a good foundation for the smooth start of the Hainan FTP construction.

The journalist also asked what are the future considerations in expanding the categories of duty-free goods? Nine of the 12 fiscal and tax policies just mentioned have been adopted and the other three policies are yet to be adopted. Next, we will step up efforts to speed up the adoption of the three policies: the zero-tariff policy for imported goods purchased by island residents, the duty-free policy for overseas exhibits at the China International Consumer Goods Expo to be held from May 7 to 10 in Hainan, and the policy to allow flights in and out of Hainan to refuel with bonded aviation fuel. We will work for the adoption of these three policies as soon as possible and closely follow the implementation of the nine policies that have already been adopted, assessing their effects promptly and make dynamic adjustments and improvements. Regarding the zero-tariff policies for list management, in particular, we will continue to expand the positive list categories and narrow the negative list categories to promote the steady progress of the Hainan FTP construction. Thank you.

Hainan Broadcasting Group:

What progress has the PBC and the SAFE made in promoting the construction of the Hainan FTP and facilitating the free cross-border capital flow since the release of the Master Plan for the Construction of the Hainan Free Trade Port last year? Thank you.

Wang Chunying:

Thanks for your question. It is stated in the master plan that "we should stick to the principle that finance serves the real economy; focus on trade and investment liberalization and facilitation to open capital accounts in phases; and promote the Hainan FTP and cross-border flow of funds in an orderly manner." According to the schedule laid out in the master plan, the PBC and the SAFE have adopted policies on the liberalization and facilitation of cross-border capital flow to support the development of the Hainan FTP. To sum up, the policies and their progress are mainly as follows:

First, the policy to promote the development of the accounting system. We support Hainan to launch free trade accounts, also known as FT accounts, to support enterprises' ability to handle local and foreign currency settlement of cross-border transactions and overseas financing business. The funds in FT accounts can be exchanged in the offshore market. In addition, we piloted the bank settlement account system in some regions, combining local currency with foreign currencies. Last September, Hainan was included as a pilot region and preparations for its launch sometime in the near future have been made.

Second, the policy to raise the facilitation of RMB settlement for cross-border investments. In September 2019, we began to support the offer of RMB settlement of cross-border goods and service trade at the banks in Hainan, upon the cross-border receipt and payment instructions submitted by the high-quality enterprises in the region. Additionally, we made the use of RMB capital account income more convenient within China. Last December, the PBC and the SAFE, together with the National Development and Reform Commission, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), and the China Banking and Insurance Regulatory Commission (CBIRC), jointly released a notice covering 15 articles in five aspects to further improve cross-border RMB policies. These policies mainly focus on the needs of the real economy, ways to promote higher levels of trade and investment of RMB settlement facilitation, means to further simplify the cross-border RMB settlement process, improving cross-border RMB investment and financing management, and facilitating the RMB receipt and payment under the current individual accounts and foreign institutions' use of RMB bank settlement accounts. Last year, cross-border RBM settlements in Hainan increased by nearly 50%.

Third, the policy for cross-border investment management in response to new forms of market demand, including implementation of the foreign investment management system of "pre-entry national treatment" plus the "negative list" in terms of foreign investment management. The exchange business related to foreign investment can be handled at the banks. The SAFE sets no limits on foreign investment not included in the negative list. Direct investments can basically be exchanged. Last December, the SAFE approved the launch of a pilot foreign investment by qualified domestic limited partners (QDLP) at the Hainan FTP and granted a pilot investment quota of $5 billion. At present, the Hainan branch of the SAFE has formulated the QDLP pilot management measures and is organizing and advancing specific pilot work.

Fourth, the policy of improving cross-border investment and financing exchange management. This policy was adopted mainly to meet the needs of investment and financing in Hainan's real economy, supporting the development of Hainan's specialty and relatively competitive industries and giving further priority support to overseas listings. Last September, we spearheaded a pilot reform of overseas listing registration for domestic companies in Hainan, which improves related registration procedures and allows companies registered in Hainan to go directly through overseas listing registration procedures at banks.

In general, the PBC and the SAFE actively implemented the master plan and specific planning work. We gave full play to the role of the Hainan FTP as an opening pilot zone at the forefront of reform. The implementation of pilot policies has been timely and effective and the policy support, including reducing processing hours and costs to enterprises, well meet the needs of Hainan's market players.

Recently, the State Council, the PBC, and the SAFE, together with the CBIRC and the China Securities Regulatory Commission (CSRC), jointly released the Guidelines for Financial Support for Hainan's Comprehensively Deepening Reform and Opening Up. The guidelines state the general principles and policy measures in six aspects on financial support for comprehensively deepening reform and opening up. These policy measures mainly include enhancing the convertibility of RMB to support the liberalization and facilitation of cross-border trade, investment, and financing; improving Hainan's financial market system; expanding the opening up of Hainan's financial industry; boosting the innovation of financial products and services; improving financial services; and strengthening financial regulation to prevent and defuse financial risks. The objective of these guidelines aims to promote the establishment of financial policies and an institutional framework suitable for the Hainan FTP and to consolidate the financial foundation of Hainan.

Next, the PBC and the SAFE will further follow the Master Plan for the Construction of the Hainan Free Trade Port to arrange key tasks step by step in phases by 2025; implement the guideline that finance serves real economy; continue to improve related policies while keeping them in line with actual economic needs and reducing risks; and further expand financial support for the reform and opening up of the Hainan FTP to promote the free and facilitated orderly flow of overseas funds. Recently, we are stepping up efforts to promote a pilot program for the higher-level opening up of cross-border trade and investment to boost innovation in cross-border investment and financial systems; improve the efficiency of market-based resource allocation; and strive to stimulate market vitality to better serve the new development paradigm. This is my response to your question. Thank you.

Chen Wenjun:

As time is limited today, our press conference ends here. Thanks to all speakers and friends from the media. Goodbye!

Translated and edited by Wang Yiming, Wang Wei, Yuan Fang, Wang Qian, Liu Jianing, Chen Xia, Lin Liyao, Fan Junmei, Zhang Tingting, Li Huiru, Cui Can, Liu Qiang, Duan Yaying, Zhang Rui, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Xu Lin, deputy head of the Publicity Department of the CPC Central Committee and minister of the State Council Information Office (SCIO)

Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs, and minister of agriculture and rural affairs

Wang Zhengpu, deputy director of the Office of the Central Leading Group for Rural Affairs, and head of the National Administration for Rural Vitalization

Hong Tianyun, deputy head of the National Administration for Rural Vitalization

Xia Gengsheng, deputy head of the National Administration for Rural Vitalization

Chairperson:

Chen Wenjun, head of the Press Bureau and spokesperson of the SCIO

Date: 

April 6, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office (SCIO). Since the 18th National Congress of the Communist Party of China (CPC), under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, and thanks to the concerted efforts of the Party and the Chinese people of all ethnic groups, China has attained a complete victory in the fight against poverty, creating a great miracle in the history of human poverty reduction. Today, the SCIO has issued a white paper titled "Poverty Alleviation: China's Experience and Contribution," which is the topic of today's press conference.

We have invited Mr. Xu Lin, deputy head of the Publicity Department of the CPC Central Committee and minister of the SCIO, to brief you on the white paper. Also present are: Mr. Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs, and minister of agriculture and rural affairs; Mr. Wang Zhengpu, deputy director of the Office of the Central Leading Group for Rural Affairs, and head of the National Administration for Rural Vitalization; and Mr. Hong Tianyun and Mr. Xia Gengsheng, deputy heads of the National Administration for Rural Vitalization. They will answer your questions. Next, we will give the floor to Mr. Xu for an introduction.

Xu Lin:

Ladies and gentlemen, friends from the media:

This year marks the centenary of the founding of the CPC. Since its inception, the CPC has taken the happiness of the Chinese people and rejuvenation of the nation as its original aspiration and mission, and united and led the people in the fight against poverty. The 100 years of the CPC's development have been a century when the Party has worked hard to eradicate poverty and backwardness and to ensure better lives for the people.

Since the 18th CPC National Congress, under the leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China has adopted a series of bold policies and measures to fight a decisive battle against poverty that is unprecedented in scale and intensity, and has benefited the largest number of people in human history. At the grand gathering held this Feb. 25 to mark China's achievements in poverty alleviation and honor its model fighters against poverty, General Secretary Xi Jinping solemnly declared: Victory in the battle against poverty is complete, and China has completed the arduous task of eliminating extreme poverty.

Today, the SCIO has issued the white paper "Poverty Alleviation: China's Experience and Contribution." The document records the course of the CPC uniting and leading the Chinese people in the fight against poverty, and particularly efforts made to achieve a complete victory since the 18th CPC National Congress, introduces China's approach, and shares its experience and actions in poverty alleviation.

The white paper, which extends to more than 30,000 Chinese characters, consists of a preface, main body, conclusion and appendix. The main body includes five parts: "The Solemn Commitment of the CPC," "Final Victory in the Fight against Extreme Poverty," "The Strategy of Targeted Poverty Alleviation," "Exploring a New Path of Poverty Alleviation" and "A Global Community of Shared Future Free from Poverty." The paper is an important historical record that offers a comprehensive picture of China's poverty alleviation effort.

China's fight against poverty entered a critical stage after the 18th CPC National Congress in 2012. At the end of 2020, following eight years of hard work, China achieved the goal of eliminating extreme poverty — a key goal for the new era of building socialism with Chinese characteristics. The 98.99 million people in rural areas who were living below the current poverty threshold all shook off poverty; and all 128,000 impoverished villages and 832 designated poor counties escaped poverty. Our complete victory over extreme poverty is an outstanding achievement in the history of both China and humanity. As stated in the white paper, the battle against poverty has been another great revolution in rural China, leading to historic and comprehensive changes. The campaign boosted overall rural development and laid a solid foundation for building a modern socialist China and realizing the Second Centenary Goal.

China's poverty alleviation experience indicates that poverty is not predestined, nor is it unconquerable. With strong will and determination, as well as practical action, one can make steady progress toward overcoming poverty and realizing common prosperity.

According to the white paper, China's complete victory over extreme poverty shows that the CPC has held fast to its original aspiration and mission, and demonstrates its ability to lead politically, to guide through theory, to organize the people, and to inspire society. It shows the strength of socialism with Chinese characteristics in pooling resources to solve major problems. It highlights China's spirit, China's values, China's strength, and the willpower of the Chinese people to strive to realize dreams with bold resolve "which dares to make sun and moon shine in new skies." It exemplifies the fearless and indomitable character of the Chinese nation — determined to struggle and resolutely overcome all difficulties and challenges along the way.

The strategy of targeted poverty alleviation is a major innovation in the theory and practice of poverty alleviation, and China's strongest weapon in its final battle to secure victory against poverty. In its poverty elimination efforts, China has launched a series of guidelines and measures to increase efficiency, summarized as accomplishing "Targeted Efforts in Six Areas" (efforts to accurately identify the poor, arrange targeted programs, utilize capital efficiently, take household-based measures, dispatch first Party secretaries based on village conditions, and achieve the set goals), taking "Five Measures for Poverty Eradication" (boosting the economy to provide more job opportunities, relocating poor people from inhospitable areas, compensating for economic losses associated with reducing ecological damage, improving education in impoverished areas, and providing subsistence allowances for those unable to shake off poverty through their own efforts), and addressing "Five Questions in Poverty Alleviation" (who should help, who should be helped, how to help, how to evaluate whether someone has emerged from poverty, and how to ensure those people stay free from poverty).

The white paper emphasizes that in addition to securing a sweeping victory in the final battle against poverty, the strategy has also given a powerful boost to modernizing China's national governance system and capacity, and to enriching and developing the CPC's guiding philosophies and governance strategies in the new era.

In its practices, China has embarked on a path of poverty alleviation and designed an approach with Chinese characteristics, offering enlightenment to the international community in its battle to reduce poverty. The white paper provides China's proposals and approach for poverty alleviation from the perspectives of upholding a people-centered philosophy, highlighting poverty alleviation in national governance, eradicating poverty through development, letting the poor play the principal role, and pooling all resources to create synergy.

China cannot develop in isolation from the rest of the world, and the world needs China for further development. China has been actively engaging in international cooperation in poverty reduction and acts as an advocate, facilitator, and contributor to the international cause of poverty alleviation. According to the white paper, as China is home to nearly one-fifth of the world's population, its complete eradication of extreme poverty – the first target of the UN 2030 Agenda for Sustainable Development – 10 years ahead of schedule, makes an important contribution to the cause of global poverty alleviation. China is ready to strengthen exchanges and cooperation with other countries on poverty reduction and make a greater contribution to building a global community based on a shared future that is free from poverty and blessed with common prosperity.

Shaking off poverty is not the finish line but the starting point of a new life and new endeavor. As the world's largest developing country, China still has much to do to bridge the gap between unbalanced and inadequate development, narrow the gap between urban and rural areas and between regions, and realize people's all-around development and common prosperity for all. China will continue to consolidate the results of poverty elimination, dovetail new measures with rural vitalization, and comprehensively push forward rural vitalization by introducing more vigorous measures and pooling more resources. The white paper has depicted a bright future of China's rural vitalization and its development by the years 2035 and 2050, saying that the nation will continue to march towards higher goals of all-round development for the people and common prosperity for all.

This is the end of my introduction. Thank you!

Chen Wenjun:

Thank you, Mr. Xu. The floor is now open for questions. Please identify the media organization you represent before asking questions.

China Central Television (CCTV):

During his remarks at the grand gathering this February to mark the nation's poverty alleviation accomplishments and honor model poverty fighters, General Secretary Xi Jinping noted that China has accomplished its poverty alleviation target of the new era as scheduled and secured a complete victory in its fight against poverty through eight years of sustained work. My question is: how do we understand this "complete" victory? Thank you.

Tang Renjian:

Thank you for your question. At the ceremony to mark the nation's poverty alleviation accomplishments and honor model poverty fighters, General Secretary Xi Jinping declared that China has secured a complete victory in its fight against poverty and created another miracle that will go down in history. It is a historic and comprehensive victory.

First, China has completely eliminated extreme poverty for the first time in its history. Through eight years of arduous work, the 98.99 million people in rural areas who were living below the current poverty threshold all shook off poverty ; all 832 designated poor counties and 128,000 impoverished villages got rid of poverty; and China has eliminated poverty over entire regions, fulfilling its solemn commitment of "leaving no one behind" as it builds a moderately prosperous society in all respects. China has completely eliminated extreme poverty for the first time in its history of thousands of years, and realized a century-long aspiration of the Chinese people.

Second, those people who have been lifted out of poverty have seen significant improvement in their living standards. The per capita disposable income of the rural poor more than doubled, increasing from 6,079 yuan in 2013 to 12,588 yuan in 2020, up by 11.6% per annum on average. The Two Assurances and Three Guarantees [referring to the assurances of adequate food and clothing and guaranteeing access to compulsory education, basic medical services, and safe housing for impoverished rural residents] have been realized. People who have been lifted out of poverty now have adequate food and clothing. Nine-year compulsory education is now available to all children from rural poor households. All poverty-stricken populations now have access to basic medical insurance, critical illness insurance, and medical assistance, thus effectively resolving the problem of access to and affordability of medical services. Around 25.68 million impoverished people from 7.9 million households have moved into proper accommodation, bidding farewell to their dilapidated houses built of materials like beaten earth mixed with straw. Rural subsistence allowances, extreme poverty relief funds, and basic pension schemes now cover almost all people in need. The welfare of special disadvantaged groups is constantly improving. Over 24 million poor people with disabilities as well as the severely disabled have now been provided with living allowances and nursing subsidies.

Third, poverty-stricken areas have gotten rid of backwardness. Infrastructure has been improved. Lack of access to transport, electricity, drinking water, and means for communication have been resolved. By the end of 2020, impoverished areas had gained 1.1 million kilometers of reconstructed highways and 35,000km of new railways, making all villages, townships, and towns in poverty-stricken areas with the right conditions accessible by paved road and provided with bus and mail routes. Effective irrigated areas have increased by more than 5.35 million hectares. Almost all rural areas enjoy a steady power supply. Over 98% of poor villages have access to optical fiber communications (OFC) and 4G technology. Tap water coverage has increased to 83% in regions that have been lifted out of poverty. Arid areas like Xinjiang Uygur Autonomous Region and Gansu province now have access to clean and safe drinking water. Each impoverished county has created a batch of new industries with distinctive features and greater capacity to facilitate poverty alleviation efforts, and increased their industrial sustainability, laying a solid foundation for rural vitalization for the next step.

Fourth, those who have been lifted out of poverty have adopted a new mindset. The battle against poverty is a complete victory on both the material and mental level. It has rekindled people's desire to seek a better life. Impoverished people have been inspired to seek prosperity through hard work, self-reliance, and entrepreneurship. They have gained a stronger sense of self-reliance and a deeper desire to rid themselves of the shackles of poverty and achieve prosperity. Each household now tries to find ways to become prosperous and each village builds businesses that help them get rid of poverty. They are ready to compete in the race to prosperity. The impoverished have been constantly upgrading their mindsets and gained a deeper understanding of markets, technology, and innovation. They have greater confidence, more active minds, and higher aspirations. Good social practices, including filial piety, harmonious neighborhoods, and modest weddings and funerals, have been promoted. A healthy and civilized lifestyle has become the new pursuit of the people who have been lifted out of poverty.

Fifth, grassroots social governance in poverty-stricken areas has been greatly improved. More than 3 million first Party secretaries and resident working team members have been selected and dispatched to carry out anti-poverty campaigns on the frontlines. Grassroots Party organizations have improved their capabilities while carrying out CPC's rural work and poverty alleviation efforts. With closer relations between the villagers and village officials, and between the Party and the people, people in poverty-stricken areas have greater trust and confidence in the Party. Self-governance by villagers is becoming more effective. As villagers are involved in discussions and management of their own affairs, they become more active in participating in grassroots governance. Collective income in impoverished villages has greatly increased. Currently, the average collective income in impoverished villages across the country has exceeded 120,000 yuan. Village organizations have become more capable of serving the people. Grassroots management and service systems in those areas are constantly improving, inspiring vitality in local communities, and forming a new dynamic for social harmony, stability, and progress.

The complete victory in poverty alleviation has fully manifested the strengths of the CPC leadership and the advantages of the system of socialism with Chinese characteristics. A will to unite as one, do our best, set targets, adopt a pragmatic approach, be pioneers, innovate, tackle tough issues head-on, and live up to our people's trust, has formed in the great endeavors of poverty alleviation. It will continue to inspire us to fully vitalize the countryside.

Prensa Latina:

I'd like to know what is the plan for China to prevent rural people from returning to poverty? Thank you. 

Wang Zhengpu:

Thank you for your question. After China's overall victory in the battle against poverty, the first problem we have to deal with is to prevent people from sinking back into poverty. People who have been lifted out of poverty and those on the verge of poverty are at risk of returning to poverty again, so we have made considerations in this regard, and I'd like to answer this question in the following five aspects: 

First, we have established a long-term mechanism. It aims to provide monitoring and assistance to prevent a return to poverty. We will mainly monitor people's income, the implementation of the Three Guarantees (access to compulsory education, basic medical services, and safe housing for impoverished rural residents), as well as safe supply of drinking water. All of these have been our priorities in poverty alleviation. By conducting such monitoring, we intend to spot any trends that indicate a return to poverty early on and intervene through various supportive measures. The central authorities will on a regular basis analyze and inform the situation, thus improving the monitoring and assistance mechanism to help those rural people with a low income. Based on national conditions and that of rural areas, we will provide categorical assistance to different regions in order to safeguard people's basic living needs in rural areas.  

Second, we will ensure that our policies are consistent and stable. The central authorities have given a five-year grace period to those counties which have escaped poverty. During this period, we will continue to provide and improve our major support policies to give them a leg up to get them going. We will further adjust, optimize, and improve those existing assistance policies and the resources leveraged for intensive poverty elimination will be gradually redirected towards an extensive drive for rural vitalization. In this regard, over 30 complementary policies have been made and they will be gradually released.

Third, we will strengthen assistance. We will continue to provide follow-up assistance to those who have been relocated from inhospitable areas. We will adopt targeted measures to develop industries based on local conditions and provide more job opportunities, as well as enhance infrastructure construction and improve public services. In order to boost industrial development, we will shore up technology, equipment, funding, and marketing, and ensure all of these aspects will be improved to a higher standard. Regarding job opportunities, we will stabilize last year's employment levels and try our best to create more job opportunities for those who have escaped poverty. Moreover, we will prioritize assistance for key counties. The central authorities have decided to identify key counties in China's western region in order to help them achieve rural vitalization. Authorities at the provincial level should also offer help to their own key counties. Such assistance will be provided according to region and category and be implemented through concrete measures. 

Fourth, we will continue to pool possible resources and forces. We have learned that it is crucial for us to pool all possible resources and forces in the fight against extreme poverty. We will continue to adopt such policies and measures, including eastern-western collaboration, paired-up assistance, the "10,000 enterprises help 10,000 villages" project, military assistance, and we will continue to dispatch officials as first secretaries and working teams to those key villages. 

Fifth, we will continue to ensure responsibilities are fulfilled. During the grace period, we will continue to implement the policy of Party secretaries at the five administrative levels of province, city, county, township, and village, working together to consolidate and extend the outcomes of poverty alleviation and fully advance rural vitalization. More evaluations will be carried out over the status of formerly impoverished people and areas in order to evaluate the quality and efficiency of poverty alleviation, and Party committees and governments at all levels will continue to take responsibility to ensure that people do not sink back into poverty in large numbers.

Follow-up assistance for the relocated population is also very crucial. The number of people who have been relocated during our poverty alleviation efforts is relatively large. For those in the large resettlement sites, we will adopt some special policies and measures to help them. I'd like to invite Mr. Hong to introduce more about these measures. 

Hong Tianyun:

I'd like to add some more information about relocating people from areas. Mr. Wang has talked about our efforts to ensure that people do not sink back into poverty in large numbers, and this is something that we attach great importance to. We all know that during the 13th Five-Year Plan period, China relocated more than 9.6 million people from inhospitable areas and achieved complete victory in poverty alleviation. The number of relocated people, which is probably unprecedented worldwide, is almost equivalent to the population of a moderately developed country. Our priorities at present are to ensure that follow-up support will be given to the resettled population so that they will remain out of poverty after a smooth relocation and resettlement as well as remain employed and have a promising future. We will offer follow-up support in the following aspects: 

First, we will intensify our efforts to help the resettled population have adequate job opportunities and stable employment. We will help them build up self-belief, ensure their access to education and skills training, as well as help them boost the industrial development by offering them employment-specific assistance. Moreover, we will help those relocated change their ideas about employment and improve their skills. We will also organize them to work in other places and create more channels for them to find employment in places near where they live, to ensure that every relocated family with a labor force will be able to find jobs.  

Second, we will promote follow-up industries to be developed in a sustainable way. In the wake of the problem that emerged in some resettlement sites due to the imbalance between industrial development and structure of the labor force, we will ensure that local authorities will make the sustainable development of follow-up industries part of their counties' overall economic development, thus leveraging their comparative advantages and encouraging primary, secondary, and tertiary industries to develop in a coordinated way. 

Third, we will strengthen infrastructure construction and improve public services. As we all know, more than 9.6 million people have been relocated from inhospitable areas. There have been 35,000 centralized resettlement sites each with a population of over 800, and over 60 large communities each with over 10,000 people. These sites must be equipped with infrastructure providing such services as drinking water, electricity, transportation, and communication. We must accelerate the construction of those facilities which have yet to be fully completed, accelerate to improve an integrated and equalized public service system, and encourage both new and old residents to share the public services.

Fourth, we will build resettlement communities featuring openness and inclusiveness. We will improve community governance with an emphasis on humanity and enrich people's spiritual and cultural lives. We will encourage relocated people to communicate with local residents, and increase their sense of belonging, identity and happiness in their new communities and new places of residence, so as to create a harmonious and friendly environment in the resettlement communities and promote openness and inclusiveness.

After Mr. Wang started working in the National Administration for Rural Vitalization, he has prioritized follow-up support measures. As the former head of the Department of Organization of the CPC Sichuan Provincial Committee, he was once in charge of the resettlement communities in Liangshan Yi Autonomous Prefecture of Sichuan province. He explored many good methods and accumulated experience in the construction of community grassroots organizations and how to make grassroots Party organizations and Party members the backbones of communities. Currently, we are rolling out the work nationwide to reassure, unite and satisfy the people. Thank you. 

New York Times: 

When I went to southeastern Gansu, I found many families who had been helped by the poverty alleviation program. If they were registered as extremely poor in 2015 and 2016, but if they became poor in 2017, they could not get into the program. Are you going to make it easier for people to enter or are you going to re-register those who are extremely poor? And second, just as you announced today, is China's poverty alleviation program practical for other developing countries that may not have as much financial resources or organizational resources as China? Thank you. 

Wang Zhengpu:

Thank you for your questions. I will answer your first question and Mr. Xia will answer the second. China's poverty alleviation program contains a lot of effective methods and experience. After the critical battle of poverty alleviation began, we had plenty of lively and practical cases, which made the battle diversified in term of forms, and effective in results. The experience can be summarized into the following aspects, which can be learned from by the international community. 

First, adopting a people-centered philosophy. The CPC strives for the goal of ensuring a happy life for the Chinese people. That is the purpose and mission of the CPC. In alleviating poverty, the whole Party united together and, under this guiding philosophy, concentrated the strength from all sectors to promote good lives for the people. I think this experience is very important. 

Second, highlighting poverty alleviation in national governance. The CPC has always regarded China's common prosperity as its target, and poverty alleviation as an important task for ensuring national peace and stability. It has highlighted poverty alleviation when setting its policies and guidelines, and when formulating five-year plans and national plans for medium- and long-term development. The Party has pooled national resources to advance this cause. Especially since the 18th National Congress of the CPC, the CPC Central Committee with Comrade Xi Jinping at its core has prioritized poverty eradication in its governance, strengthened top-level design, increased fiscal investment and mobilized people from all walks of life. An institutional system for reducing poverty has been built, which has effectively supported the smooth advancement of poverty alleviation. 

Third, eradicating poverty through development. There is a saying in the poverty alleviation cause: "Poverty alleviation should be taken as the greatest opportunity for development." Development plays a decisive role in poverty alleviation. We must address the problem of unbalanced and inadequate development through economic development. Since the PRC's founding in 1949 and especially since the launch of reform and opening-up in 1978, the country has witnessed rapid economic and social development, with the economy and national strength growing steadily, which has won global recognition. This economic development has greatly promoted poverty alleviation, laid a firm foundation, and provided solid support for large-scale development-driven poverty alleviation efforts. 

Fourth, pressing ahead with poverty alleviation based on the actual conditions and a realistic appraisal of China's situation. China has set its poverty threshold and its poverty alleviation goals and strategies in a scientific way, and worked to create better ideas and methods. It has advanced this undertaking step by step and with steady efforts. After socialism with Chinese characteristics entered a new era, General Secretary Xi Jinping proposed the strategy of targeted poverty alleviation. The approach shifted from broad-brush policies to targeted measures based on specific conditions. The model of poverty alleviation changed from mainly relying on external support to a more sustained, self-motivated effort. The assessment system has shifted focus from regional GDP as the main indicator to the genuine results of poverty alleviation. The methods and experience are all based on China's situation. I consider this to be an important experience for other countries' poverty alleviation work as well. Every country and region has its own conditions, on which its poverty alleviation must be based. 

Fifth, letting poor people play the principal role. This encourages them to play their part, since they are the main players in eliminating poverty. China has inspired its people living in poverty to strive for prosperity and has provided them with the necessary education, so that they have the ambition to emerge from poverty and the tools to succeed. With education and training provided by the government, improvements to poverty alleviation methods, and the building of an incentive mechanism, poor people are encouraged to rely on their own efforts to escape poverty. 

Sixth, pooling all resources to create synergy. This is the political, systematic and organizational advantage of the CPC. I mentioned just now a slew of practices such as the eastern-western collaboration, fixed-point poverty alleviation carried out by government institutions and enterprises, and the campaign of "10,000 businesses helping 10,000 villages." Other political parties, federations of industry and commerce as well as prominent individuals without party affiliation have leveraged their strengths to contribute intellectual and material support. All sectors of society have united with common purpose and acted in unison to care about poor people and care for the cause of poverty alleviation.

We have summarized the six methods above as reference for the international community in alleviating poverty. As for the registering of people as poor, this is crucial in targeted poverty alleviation. I will let Mr. Xia answer this question.

Xia Gengsheng:

Thank you for your questions. It is fair to say that targeted poverty alleviation holds the golden key to securing victory against poverty and is also an innovative and most significant means during this latest battle against poverty. Identifying and registering people in need is the first step of targeted poverty alleviation. As we know, identifying people in need is a weak link that exists concerning our poverty alleviation work in poor areas. This is a dynamic process that involves preliminary identification, relatively accurate identification, and then accurate identification which cannot be achieved overnight. Since the launch of identification and registration projects in 2014, a total of 29.48 million poor households and 89.62 million poor people have been identified. For the first time, China has identified the distribution of its poor population, the cause of their poverty, and their individual needs. Between August 2015 to April 2016, we reviewed our work, disqualifying those ineligible for poverty alleviation, while also adding those who met the conditions but went overlooked. These procedures have been adjusted annually since 2017 in a bid to improve the accuracy of our work.

This shows that China's identification of poor households is dynamic, rather than a once-and-for-all thing. This is of crucial importance regarding how we identify targets, no matter whether it is during our battle against alleviating extreme poverty or the consolidation of the results of poverty elimination. Our identification methods involve three aspects. First, poor households are encouraged to apply for help themselves because they best know their difficulties and weaknesses. Second, grassroots officials are in the best position to report on the situation on local conditions as their daily work is closely related to the lives of poor people. Third, data-matching from different sectors can also help us identify the poor. Through big data analysis such as sudden and drastic medical expenses or the plummeting of income due to unemployment, we can identify, intervene, and support those in need promptly and help them apply for assistance. In addition, we also set up the "12317" hotline to allow for the supervision and reporting of misconduct in poverty alleviation work. Individuals who are eligible but weren't included in can call this number so that we can check and solve the problems. Thank you.

Market News International:

Experts predict that these over 100 million rural residents who have recently shaken off poverty could be the main middle-income spending force in the future. What kind of work should be done in order to help them move into middle-income groups? My second question is about infrastructure investment in rural vitalization. Will there be any financial support on the policy side? What will be the major methods in this regard? Will this increase the burden of debt for local governments? Thank you.

Wang Zhengpu:

You've raised two important questions. The first question is about how to help low-income populations become middle-income groups. This is Mr. Xia's field of work, so he will take this question. The second question is about investment, financing, and local government debt, which is Mr. Hong's field of work. Let's give the floor to them. Thank you.

Xia Gengsheng:

This is a good question. Although China has secured victory against poverty and a basic standard of living is now guaranteed among those who have shaken off poverty, a portion of them continues to live with a low income, and there remains a certain gap between them and middle-income groups as you mentioned. Helping the people who have just shaken off poverty gradually become a middle-income group will benefit our people, country, and the world. Once these 100 million people become middle-income earners, tremendous potential will be released by their spending activities and industrial development. To achieve a leapfrog development from poverty alleviation to middle-income level, we need to work on the following three aspects:

First, we need to promote income growth through industrial development. On the basis of effectively ensuring the supply of food and major agricultural products, we need to speed up efforts to develop specialized farming and livestock breeding methods that utilize local strengths, as well as develop the agricultural-product processing industry. We also need to foster new industrial and business models such as rural tourism, rural e-commerce, and real-life experience activities in rural areas. We need to extend the industrial chain, improve the value chain, and build the supply chain. Currently, we also need to redouble our supportive efforts via consumption. Over the past few years of poverty alleviation works, the farming and livestock breeding industries have produced many goods. Thus, we need to support them via consumption and translate their harvest into income, in a bid to build their capacity for self-development.

Second, we need to promote income growth by stabilizing employment. Employment is an important way of increasing income and ensuring its stability will help ensure a fundamental income for those lifted out of poverty. This year, we set the target of providing no less than 30 million job opportunities to people lifted out of poverty, and this has so far proved successful according to the current situation. These people now choose to either work as migrant workers or in areas closer to home, and the smooth flow of people between the two has been ensured. Migrant workers are organized by the labor cooperation program between eastern and western regions. This can provide targeted assistance for migrant workers in need and help them increase their income. In terms of job opportunities in places close to their homes, they are provided help via local poverty alleviation workshops, leading enterprises, and public-service sectors. In addition, carrying out vocational skills training programs is very important and can help those people lifted out of poverty to gain upgraded job opportunities and improve their potential for employment and income.

Third, we need to promote income growth via innovation, startups and entrepreneurship. Rural areas, especially those lifted out of poverty, have huge development potential and there are many ways and opportunities for them to promote income growth. This is opening new prospects for people to engage in innovation and start businesses. We will continuously improve the ecosystem for rural areas in innovation and business. For people who have been lifted out poverty and have the competence, are business-minded, and show willingness, we will encourage them to start businesses and increase their income. We will also focus on the training of family farm operators, farm cooperative leaders, innovation and business pioneers, rural e-commerce talents, and rural craftsman in a bid to promote entrepreneurship in rural regions and help those who have emerged from poverty increase their income and gain wealth. Thank you.

Hong Tianyun:

I'll answer the second question. The infrastructure investment for rural vitalization is mainly focused on rural development. Conducting the rural development initiative is a major arrangement made at the fifth plenary session of the 19th CPC Central Committee and an important focus for comprehensively promoting rural vitalization. This year marks the first year of comprehensively carrying out the rural vitalization development initiative and we will strive to succeed in the following five aspects: planning, construction, services, governance, and investment guarantees.

First, we will focus on planning. Rural plans are the blueprints for rural development. Planning should come before construction. As people often say, planning should be made scientifically and on a long-term basis, while construction should be pragmatic. We will clarify the layout and classification of villages, actively and orderly formulate a practical village scheme that integrates multiple plans, and realize the full planning coverage of those villages that have conditions and needs. Since the rural vitalization strategy was put forward at the 19th National Congress of the CPC, China's eastern region has taken the lead and gained good experience. We must start from the current basis and reality, retain the characteristics of the countryside, and avoid disordered and aggressive demolition and construction. In particular, we must strictly regulate the demolition and merger of villages, and must not force farmers to move into apartments. Rural development is to serve its residents.

Second, we will focus on rural infrastructure construction. We will continue to prioritize public infrastructure construction in the rural areas and strive to promote infrastructure coverage in villages, and by extension, to households. Access to "water, electricity, road, communication, and internet," energy supply, sanitation facilities, and garbage and sewage treatments are all basic elements necessary for modern civilized life in rural areas and the main focus of our rural development. We will guide local governments to determine the development priorities in light of local conditions and meet the most pressing needs of the rural residents. 

Third, we will focus on providing services. We will improve the level of basic public services in rural areas, establish a mechanism for balanced allocation of public resources between urban and rural areas, strengthen the allocation of basic public services to rural areas, and gradually unify urban and rural standards and systems. Next, we will concentrate on key issues such as rural education, healthcare, elderly care, and social security, and continue to realize equal access to basic public services in urban and rural areas.

Fourth, we will focus on governance. We have launched a five-year campaign for improving rural living environments to promote the marked upgrading of urban and rural appearances. We will give priority to supporting household sanitation in the rural areas of China's central and western regions, and advance toilet upgrading and sewage treatment in rural areas in an integrated manner. We will encourage the sorting and treatment of household waste at the source in rural areas where conditions permit and intensify efforts to make villages cleaner and greener, making rural areas more livable and rural residents more satisfied.

With the four "focuses" mentioned above, investment in rural development must be guaranteed. We should, through innovating the mechanism of investment and financing, form a diversified investment pattern featuring prioritized financial guarantees, focused financial support, and active social participation. Earlier, Mr. Tang introduced the No. 1 Central Document for 2021 and answered questions from the press. As we all know, this year's No. 1 Central Document issues a series of specific policies for input guarantees. According to the document, the general public budget should continue to prioritize spending on both agriculture and rural areas, and the central government spending on agriculture and rural areas should be further expanded. In addition, the share of the revenue from land transfers diverted to rural areas should be increased and local governments should be supported in issuing general bonds and special bonds for modern agriculture facilities and rural development to continue to enhance their financial support.

Rural vitalization is a long-term and historic task. While proceeding with the work, we must spare no efforts within our capacities and seek truth from facts. At the same time, the relevant departments have also been very strict in managing local government debts. We believe that the debt burden among local governments won't increase overall and is manageable. Thank you.

Shangyou News:

My question is about how poverty alleviation has been promoted in ethnic minority areas and how poverty reduction achievements will be consolidated in these areas next? Thank you.

Wang Zhengpu:

Thank you for your questions. As one of the main battlefields in the fight against poverty, ethnic minority areas have long been lagging behind, and many such areas, in particular, have a small population and a weak foundation. We have paid great attention to these areas in the fight against poverty. Mr. Xia will give you more details in this regard.

Xia Gengsheng:

As we all know, China is a big family composed of 56 ethnic groups, sharing the common name of the Chinese nation. Our country has made unity and common progress as well as common prosperity and development the theme of the Chinese nation's work in the new stage for a new era. Regarding poverty alleviation, General Secretary Xi Jinping has stressed on many occasions that no single ethnic minority group should be left behind in the country's building of a moderately prosperous society in all respects. This is a solemn commitment of the CPC. We can see it from three junctures. The first is the eight-year poverty alleviation campaign. During this period, China has always made ethnic minority areas and ethnic minorities the key areas and key groups of its poverty elimination endeavors and has adopted targeted strategies to consistently support them. For example, the central government has allocated nearly 300 billion yuan in poverty alleviation funds, or 45% of the country's total, to the eight provinces and autonomous regions with large ethnic minority populations (Guizhou, Yunnan, and Qinghai provinces and the Inner Mongolia Autonomous Region, Xinjiang Uygur Autonomous Region, Tibet Autonomous Region, Guangxi Zhuang Autonomous Region and Ningxia Hui Autonomous Region) over the past eight years. In addition, integrated government funds for rural development in the eight provinces and autonomous regions made up 39% of the country's total. Meanwhile, support in finance, land, human resources, and other aspects have also been weighted toward these regions, providing a strong guarantee for winning the battle against poverty in ethnic minority areas.

The second juncture was on June 23, 2017, when General Secretary Xi Jinping presided over a symposium in Taiyuan, Shanxi province, on poverty alleviation in severely impoverished areas. According to issues discussed during the symposium, most ethnic minority areas were considered severely impoverished areas. The "three areas" (Tibet Autonomous Region, the Hotan, Aksu, Kashgar prefectures and the Kizilsu Kirgiz Autonomous Prefecture in southern Xinjiang, and prefectures and counties with large Tibetan populations in the provinces of Sichuan, Yunnan, Gansu and Qinghai) and the "three prefectures" (Liangshan Yi Autonomous Prefecture in Sichuan, Nujiang Lisu Autonomous Prefecture in Yunnan, and Linxia Hui Autonomous Prefecture in Gansu) were made the key battlegrounds for the elimination of poverty. That meant that new poverty reduction funds, projects, and measures were weighted toward these regions. It is fair to say that through extraordinary support, severely impoverished areas have accelerated in casting off poverty and no longer drag national efforts down.

The last important time is 2020, final year for winning the battle against poverty. In the year, we speeded up our efforts to lift the remaining 52 impoverished counties, mostly located in ethnic minority areas, out of poverty. This was considered the last task for eliminating extreme poverty. After relentless efforts, extreme poverty was eliminated among all minority ethnic groups including 28 with small populations. Some ethnic groups, still at the later stage of primitive society when the PRC was founded in 1949, have now been enabled to make the great leap to socialism and, then again, great strides towards achieving moderate prosperity in all respects. General Secretary Xi Jinping's solemn promise that no ethnic group should be left behind on the way to eliminate poverty has been fulfilled. Per capita net income of the poor in the five autonomous regions (Inner Mongolia, Guangxi, Tibet, Ningxia and Xinjiang) and the three provinces with a large multi-ethnic population (Guizhou, Yunnan and Qinghai) have increased significantly, breaking through the 10,000-yuan mark at the end of last year. This was higher than the income level for the poor registered under the national system of identifying people in need to know whom to help. This is a hard-won achievement. Social and economic development in ethnic minority areas have accelerated notably, basic living and working conditions have improved and tremendous changes have taken place. People of minority ethnic groups now have a much greater sense of gain, happiness and security. We visited some of those freed from poverty in Liangshan last week. Their happiness could be seen on their faces. This is a very big change in recent years. According to third-party evaluation, by the end of 2020, the average satisfaction level of the general public for the poverty elimination work in the aforementioned eight provinces and autonomous regions was above 94%, showing the battle against poverty is a project beneficial to the wellbeing of the people winning their heartfelt approval. 

To consolidate the results of poverty elimination, we will continue to prioritize ethnic minority areas and their people as we move forward. We will make targeted efforts in the following respects: First, we will work to ensure that the support policies for formerly impoverished groups will be effectively implemented in all ethnic minority areas. Just as my colleagues said a moment ago, we will make sure that people do not sink back into poverty in large numbers. Second, we will continue to strengthen preferential treatment to ethnic minority areas. For key counties in the rural vitalization program, again mostly located in ethnic minority areas, we will adopt preferential policies and give concentrated fiscal, financial, land, talent, infrastructure and public service support to strengthen their points of weakness at a faster pace and improve their development capacity. In addition to these counties, the government will also support the whole of Tibet and Xinjiang to consolidate the results of poverty alleviation and promote rural vitalization. Paired assistance for Tibet, Xinjiang and the prefectures and counties with large Tibetan populations in the provinces of Sichuan, Yunnan, Gansu and Qinghai will remain unchanged. Third, we will further increase budgetary input. During the period of grace, fiscal investment will remain stable and composition of fiscal spending will be optimized. 

With these measures, we hope to ensure no ethnic minority area and people will be left behind in the efforts to consolidate the results of poverty alleviation and good performances will be delivered in pursing common prosperity. Thank you.

Xinhua News Agency:

My question is for Mr. Xu. In the past eight years, we have lifted nearly 100 million rural poor out of extreme poverty. Why was China able to achieve this? The white paper has offered much information, but what do you think is the most important reason? What experience have we gained for eliminating extreme poverty? Thank you. 

Xu Lin:

Thank you for your question. The main reason behind China's success in eliminating extreme poverty is the six experiences introduced by Mr. Wang just now. The most important of all, I think, is that the Communist Party of China cares for the people. From the Party leader to ordinary Party officials, we all put people first. 

For the past century, one generation of Party members after another have made continuous efforts toward the goal of seeing that the people can live a good life. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has prioritized poverty elimination in state governance and mobilized the whole Party and the whole country to engage in the battle against poverty.

Soon after the 18th CPC National Congress, General Secretary Xi Jinping visited Fuping in Hebei province to inspect development-driven poverty alleviation work there. During the visit, Xi clarified the relationship between eliminating extreme poverty and building a moderately prosperous society in all respects and mobilized the whole Party and the whole country to work hard to win the battle against poverty. 

General Secretary Xi Jinping was always concerned with impoverished regions and families in straitened circumstances, has always put poverty alleviation at the top of his work agenda and devoted much energy to it. He has assumed leadership, made plans, and directed the battle in person, and called meetings to hear reports and make plans at every critical stage of the battle. He has presided over seven central seminars on poverty elimination and made over 50 fact-finding trips, giving important instructions clarifying the direction of poverty alleviation.

He has visited every one of the 14 contiguous poor areas across the country and over 20 poor villages, and sat in impoverished households to hear of their difficulties, suggestions and needs.

You may still remember moving scenes in many news reports. For example, in Yuangudui village, Dingxi city of Gansu province, General Secretary Xi walked into a low and poorly-lit rural home and took a drink of water from a water vat by the wall with a gourd ladle to taste the quality of water the villagers were drinking. 

In Zhangzhuang village, Lankao county, Henan province, holding the hand of villager Zhang Jingzhi, General Secretary Xi looked at the 85-years-old's kitchen and bedroom. He also chatted with the family to learn about their grain output, whether they had received agricultural subsidies and if they were covered by subsistence allowances and medical insurances. 

General Secretary Xi's visits to the poor, his fact-finding trips and the plans he has made all embody the deep love of the people's leader for the poor, and have warmed their hearts, roused their enthusiasm to fight poverty and greatly boosted the confidence and morale of the whole Party and the whole country to win the battle against poverty. 

Poverty alleviation is a battle without smoke. On this battlefield, Party officials have dedicated themselves with great zeal, fulfilled their promises with actions and took great pains and even sacrificed their lives in exchange for the happiness of the poor. Here, I would give the examples of two ordinary Party officials. 

The first example is Jiang Haiquan, who was sent by the National Audit Office to serve as the first secretary of Jiashi village in Qiandongnan Miao and Dong autonomous prefecture, Guizhou province. When he arrived at the village, initially the villagers respectfully stayed out of his way because they thought that Jiang, having previously worked in a ministry in the big city of Beijing, would have no idea of the general situation in such a mountain village. However, Jiang visited the villagers to get to understand what problems they were facing, listened to their opinions, and helped them one by one. Gradually, the villagers accepted and respected him very much. When his two-year term was about to expire, all of the villagers jointly signed a petition marked with their thumbprints, hoping that he would continue to work in the village. He also couldn't bear to leave, so decided to work in the village for another two years. His daughter was only 3 years old when Jiang left for the village to help with the poverty alleviation; by the time he returned home, she was already in elementary school. His daughter missed her father but was sensitive for her age, saying that although her father hadn't come back home to accompany her to Children's Day for three years, she had her father's letters and promise that he would come back when the children in the mountain village lived a happy life like her.

Another example is Yang Ning, secretary of the Party branch and head of the village committee of Jiangmen village in Rongshui Miao autonomous county, Guangxi Zhuang autonomous region. She graduated from Guangxi University in 2010 and before applying to work as a village official in her hometown, becoming an assistant to the village director. She has devoted herself to helping lift the villagers out of poverty, working to change her hometown. As a member of the Miao ethnic group herself, she explored ways of poverty alleviation with her fellow Miao villagers and finally found a way to increase people's income by developing high mountain ecological agriculture. Worrying about her hometown fellows who had not yet completely escaped poverty, she decided to stay in the village even after her two consecutive terms had expired. In 2017, she was elected as the head of the village committee with a high approval rating. Now, with 326 poor farmers in 94 households in Jiangmen village having been lifted out of poverty, poverty has been eradicated. Yang Ning said that everyone has ideals and dreams and her dream is to use the knowledge she has learned to help the Miao people out of poverty and toward prosperity.

These grassroots cadres and poverty relief workers are ordinary people, and what they have done may seem trivial but is very pragmatic. It is these grassroots cadres, poverty relief workers, and CPC members who are the powerful forces of winning the battle against poverty. Thank you.

Farmer.com.cn: 

After winning the battle against poverty, the focus of the work related to agriculture, rural areas, and farmers has historically shifted to promote rural vitalization in an all-round way, which involves all aspects of the above-mentioned work. What's the next priority? Thank you.

Tang Renjian:

Thank you for your question. From poverty alleviation to promoting rural vitalization in an all-round way, a landmark change and strategic transition has been made in the work related to agriculture, rural areas, and farmers. The rural vitalization efforts have been mentioned several times in the previous questions and answers. Many examples are vivid and touching. We have worked in local departments and witnessed so many stories. Therefore, for the next step, we must continue to promote comprehensive rural vitalization in line with these guiding principles, ideas, and requirements.

Promoting rural vitalization in an all-round way involves a wide range of sectors. We do need to think carefully about where to start and what we should prioritize. We need to take all factors into consideration, while at the same time focus on some major work. The focus is as follows: First, we must first ensure food security. To the people, foodstuff is all-important. This is our top priority in governing the country. We will strongly implement the food crop production strategy based on farmland management and technological application, which lay a material foundation. The key is to solve issues related to seeds and arable land and to develop the seed industry. We will work to maintain the red line of 1.80 billion mu (120 million hectares) of arable land and one billion mu of high-standard farmland, which are the cornerstone of food security. At the same time, it is necessary to provide benefits to the farmers who grow grain and to make sure the local Party committees and governments shoulder their responsibilities. We must establish a mechanism guarantee of "two supplements," which is supplement by benefits and supplement by obligations. "Supplement by benefits" refers to allowing farmers to make profits from growing grain by improving corresponding agricultural prices and subsidy policies. "Supplement by obligations" refers to consolidating the obligations and responsibilities of local Party committees and governments regarding food security. In short, our goal is to ensure that the national grain output exceeds 1.3 trillion jin (650 million metric tons) and rises steadily, not only this year but also during the 14th Five-Year Plan period (2021-2025). At present, the summer grain is growing very well—a good sign of the harvest to come.

Second, we will consolidate poverty alleviation outcomes. It is not easy to win the battle against poverty, and by no means easy to consolidate this historic achievement. In general, we will maintain a stable assistance policy in areas that have escaped poverty and identify a number of key counties in the western region to help them develop and promote rural vitalization. For those who are prone to falling back into poverty, a dynamic monitoring mechanism will be established to identify and assist as early as possible. In brief, efforts must be made to prevent any large-scale relapse into poverty.

Third, we will develop rural industries that can benefit people. Increasing rural residents' income is a key approach to solving many problems in rural areas. As mentioned just now, we will make use of the multiple functions of rural areas—not just agriculture—because providing food is not the only advantage of these areas. We can give full play to other advantages, including ecological conservation, leisure tourism, and cultural inheritance. We will develop new industries and business formats such as rural tourism and recreation; promote the integration of primary, secondary, and tertiary industries in rural areas; maintain industries in the countryside as much as possible; and extend the industrial chain so that farmers can participate and benefit more.

Fourth, we will build the "hardware and software" in villages, and promote the coverage of public infrastructure in rural areas and extend it to households. I mentioned in previous press conferences that infrastructure problems have been basically solved at the level of administrative villages, and some have been solved at lower levels, but there are still gaps. Therefore, going forward, our focus is to promote solutions below the level of administrative villages, especially roads, which includes roads leading to different parts in villages, main roads in villages, as well as industrial roads, resource roads, and tourist roads for industrial development. We need to build these roads. Next, we will resolve the issue of cold chain logistics for storing agricultural products and keeping them fresh. It involves the upward movement of agricultural products from villages into the cities, and the downward movement of industrial products into villages and households. Solving these two major problems will not only improve the lives of the people, but also promote agricultural production. These facilities are our next priority. At the same time, we will improve the level of public services in rural areas, strengthen improvements to rural governance, improve social etiquette and civility in villages, and strive to further advance cultural and ethical progress. After a period of hard work, the look of the countryside will change both inside and out. Thank you.

Phoenix TV:

Some media outlets have stated that China's current poverty alleviation standards are lower than the standards set by the World Bank. What are your thoughts on this? Thank you.

Wang Zhengpu:

This is a frequently asked question, and I noticed that many reporters also asked this question during the sessions of China's top legislature and top political advisory body held this March. The spokespersons of the two sessions have already answered it many times. Since you're asking again today, let's allow Mr. Hong Tianyun, deputy head in charge of the matter, to answer your question.

Hong Tianyun:

Thank you very much. The determination of national standards based on the national economy, the level of social development and the basic living needs of the poor population have been consistent and ongoing practices in China since the implementation of the large-scale, planned and organized poverty alleviation program. China first formulated poverty alleviation standards in 1986. The standard at that time was 206 yuan, and the corresponding number of people living in poverty was 125 million. The priority was to solve the problem of food and clothing. The second time was when the country's first 10-year Outline of Development-driven Poverty Alleviation in Rural Areas was formulated in 2001, when the standard was raised to 865 yuan, corresponding to 94.23 million poor people. The third time was the formulation of the China's second 10-year Outline of Development-driven Poverty Alleviation in Rural Areas in 2011. The standard was raised again to 2,300 yuan, which was based on the 2010 constant price, corresponding to 122 million poor people.

Since the poverty alleviation work began, the identification and alleviation of the poor population in China have been based on the unit of households. The measurement standard is "one income, two no-worries and three guarantees," which is easy for grassroots and frontline officials and people to remember. What are the identification standard and poverty alleviation standard? They are these "one," "two," and "three." The "one income" refers to the annual per capita net income stably exceeding the current national poverty alleviation standard, which is 2,300 yuan as I just mentioned, with the current amount being about 4,000 yuan by 2020. The "two no-worries" and "three guarantees" refer to stable realizations of "no worries about food" and "no worries about clothing," as well as guarantees on "compulsory education," "basic medical care" and "housing safety." In the specific implementation process, the guarantee of the safety of drinking water is also included. The standard for the lifting of the poor population out of poverty in China is a comprehensive multi-dimensional standard, which not only considers income, but also the realization of poor people's rights to live and to develop. On the whole, it is higher than the extreme poverty standard of the World Bank, and also higher than the absolute poverty line determined by the 2030 Agenda for Sustainable Development set by the UN in 2015. It reflects the reality of China's socio-economic development and the basic requirements for building a moderately prosperous society in all aspects.

I would like to share a statistics report. By the end of 2020, the net income per capita of China's registered poor population reached 10,740 yuan, far exceeding the international extreme poverty standard. Next, in accordance with the relevant requirements and arrangements of the CPC central committee and the central government on effective connection between consolidating and expanding the results of poverty alleviation and rural vitalization, we will maintain the overall stability of the existing policies, support and further help areas and people lifted out of poverty; continue to support the development and growth of industries of rural characteristics in poverty-alleviation areas; promote stable employment for people who have escaped poverty; provide solid follow-up support for people relocated from inhospitable areas; ensure stable and continuous income growth for people lifted out of poverty; and move toward the goal of gradually realizing common prosperity for all. Thank you.

Yomiuri Shimbun:

China's goal is to achieve more obvious substantive progress for the common prosperity of everyone by 2035. In order to achieve this goal, it is essential to increase the income of farmers and develop rural areas. What kind of policies and measures will the National Administration for Rural Vitalization adopt? Thank you.

Hong Tianyun:

Thank you. The topic of rural vitalization is very popular today, and my colleagues have responded from different angles and aspects. By 2035, we will make more obvious substantive progress in achieving common prosperity for everyone as a mid- to long-term strategic goal set by the CPC and the central government. Rural vitalization involves a wide range of areas. It is a long-term and arduous task. It needs to bring together the powerful forces of the whole Party and all aspects of society to promote its implementation, and requires coordinated operations and joint advancement by all regions and departments. There is an old saying in China: "When everyone helps gather firewood, the flames rise high." I hope everyone will work together to promote, support and participate in this work.

We are duty-bound to promote rural vitalization in an all-round way. The administration for rural vitalization will work with relevant departments to further promote the implementation of various measures. At the same time, we must focus on the key points. Regarding the increase in farmers' income, this will mainly be achieved by developing industries, promoting employment, and continually increasing farmers' operating income and wages. This is the main source of income for rural people in China, and we must make great efforts to do it well. Regarding the development of rural areas, the next step is to start implementing rural construction activities, vigorously implement rural infrastructure construction, continuously improve the level of public services in rural areas, and promote the development of urban and rural integration. Meanwhile, we will continue to strengthen rural governance, promote the development of rural social undertakings and rural culture, further advance cultural and ethical progress, and continuously improve the level of good governance in rural areas. Our country is very large, and the differences among provinces, regions and municipalities are relatively big. East China is one step ahead, and there are many mature and successful experiences. The central and western regions are doing relevant work in a concrete, detailed and competent manner through studying and promoting these experiences.

China Daily:

We know that the National Administration for Rural Vitalization has already been established. We are very curious about how it operates. Could you please introduce it? My second question is: Now that the country's "No. 1 central document" for 2021 requires a rural construction action plan to be launched this year, what priorities do you have for implementation of the first year of the plan? Thank you.

Wang Zhengpu:

I know you all have a keen interest in knowing more about our rural vitalization work as well as the National Administration for Rural Vitalization. After the victory in the battle against poverty is complete, the focus of work related to agriculture, rural areas, and rural people will be shifted to comprehensively promoting rural vitalization. As a result, some adjustments will be made to the relevant institutions. The central government has decided that the Central Leading Group for Rural Affairs will undertake the functions of the former State Council Leading Group of Poverty Alleviation and Development and the State Council Leading Group Office of Poverty Alleviation and Development will be restructured to become the National Administration for Rural Vitalization. The Administration now falls under the Ministry of Agriculture and Rural Affairs and is mainly in charge of consolidating the achievements of poverty elimination and coordinating all concrete activities to implement the rural vitalization strategy.

As we shift our focus from poverty alleviation toward comprehensively promoting rural vitalization, our work will target a broader group, cover more areas, and meet higher standards. The task of comprehensively implementing the rural vitalization strategy is not second to the fight against poverty in depth, breadth, and difficulty. I may say that departments related to rural vitalization work shoulder major responsibilities and have a lofty mission to perform. We will further enhance the sense of responsibility, perform our duties strictly as the National Administration for Rural Vitalization, continue to promote the spirit of fighting poverty and achieve new victory on a new journey toward rural vitalization.

We are now carrying out overall planning for the rural vitalization work. I hope that journalists and media will provide support and assistance for our work. Also, we welcome your supervision. Let us join hands and create synergy in promoting the healthy development of China's rural affairs. 

The nature, main content, and main targets of the rural vitalization strategy are clearly defined. We take the strategy as a key driver in work related to agriculture, rural areas, and rural people in the new era. Its main content includes vitalization in five areas, namely industrial vitalization, talent vitalization, cultural vitalization, ecological vitalization, and organization vitalization. The strategy's overall goal is also clear, that is, to build rural areas with thriving businesses, pleasant living environments, social etiquette and civility, effective governance, and prosperity. We also set clear phased goals for rural vitalization in 2025, 2035, and 2050. Meanwhile, there will be some specific targets set by each Five-Year Plan that will promote step-by-step rural vitalization. China is a vast country with a huge population, and local conditions vary greatly from region to region. Local authorities have their specific goals, measures, and means in promoting rural vitalization. We believe that under the general goal set at the central government level, local authorities will surely meet their set targets at every stage through constant exploration and efforts. 

As for your second question, the rural construction work is now progressing steadily. The main target of the work is to upgrade existing infrastructure facilities. During its fight against poverty, the country has input a large amount of manpower, material, and funding to step up the development of infrastructure facilities in impoverished areas. So far, great improvements have been made and witnessed by all regarding roads, water supply, telecommunication facilities, and other village-level public infrastructure facilities in impoverished areas.

The next target for us to work toward is the further promotion of rural construction. The other speakers also talked about this topic just now. For example, roads should be extended to reach village communities and households. Some special roads for industry or tourism should also be further extended. A large number of existing infrastructure facilities need to be upgraded and constant efforts should be made in this regard. Furthermore, we will step up the improvement of rural living environments by upgrading toilets, sewage treatment systems, and the domestic garbage collection and transfer system. Statistics show that 68% of rural populations now have access to sanitary toilets and nearly 90% of domestic garbage undergoes centralized treatment. Now, our greatest weakness lies in domestic sewage treatment in the rural areas and we have invested heavily in this area. Currently, local authorities have been dealing with this problem in different ways, such as connecting with the sewage system in cities and building independently operating sewage treatment facilities, as well as other local approaches. All in all, I believe that the rural construction action plan will surely make new progress with the constant efforts made by local authorities. 

The rural vitalization strategy has attracted wide attention and concern from all sectors of society since the concept was first raised at the 19th National Congress of the Communist Party of China. We hope that journalists attending this press conference will help publicize the positive approaches adopted by local authorities so that they can learn from each other and jointly promote the healthy development of rural vitalization work. Thank you.

Tang Renjian:

I would like to add something. There are three institutions in charge of the rural vitalization work, namely the Office of the Central Leading Group for Rural Affairs, the Ministry of Agriculture and Rural Affairs, and the National Administration for Rural Vitalization. Among them, only the last institution's name reflects its role in promoting rural vitalization. In the future, the Office of the Central Leading Group for Rural Affairs and the Ministry of Agriculture and Rural Affairs will study and promote the establishment of laws, regulations, plans, strategies, and major policies on rural vitalization, so as to perform their functions from different perspectives and levels. Thank you. 

Chen Wenjun:

Thank you, speakers, and many thanks to journalists. Today's press conference is concluded. See you next time.

Translated and edited by Zhang Liying, Guo Yiming, Gong Yingchun, Liu Jianing, Zhu Bochen, Xu Xiaoxuan, Yuan Fang, Chen Xia, Wang Yanfang, Zhou Jing, Li Xiao, Li Huiru, Fan Junmei, Liu Qiang, Zhang Rui, Wang Qian, Wang Yiming, Yang Xi, David Ball, Jay Birbeck, Tom Arnstein and Geoffrey Murray. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Liu Guiping, deputy governor of the People's Bank of China (PBC)

Wang Xin, head of the Research Bureau at the PBC

Sun Guofeng, head of the Monetary Policy Department at the PBC

Zou Lan, head of the Financial Market Department at the PBC

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date: 

April 1, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to the press conference held by the State Council Information Office (SCIO). The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) established a comprehensive overall plan for coordinated regional development, and the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 also reflected the guiding principles of the session. The finance sector plays a crucial role in promoting coordinated regional development under the new development paradigm. Today, we have invited Mr. Liu Guiping, deputy governor of the People's Bank of China (PBC) to brief the media on relevant issues and field questions. With us, we also have department heads from the PBC, including Wang Xin, head of the PBC's Research Bureau; Sun Guofeng, head of the Monetary Policy Department; and Zou Lan, head of the Financial Market Department.

Next, I will give the floor to Mr. Liu.

Liu Guiping:

Ladies and gentlemen, friends from the media, good afternoon. The fifth plenary session of the 19th CPC Central Committee clearly proposed accelerating the construction of a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. This is a major decision made by the CPC Central Committee with Comrade Xi Jinping at its core, after evaluating the situation based on the changes in China's development stage, environment and conditions, as well as changes in its comparative advantages in particular.

The conditions necessary for achieving smooth economic circulation are the matching of supply and demand, coordination between regions as well as between urban and rural areas, and domestic and international circulations reinforcing each other. Among these, promoting coordinated regional development is an important foundation for accelerating the fostering of a new development paradigm, which ensures social harmony, political stability and sustainable economic development. During the 13th Five-Year Plan period (2016-2020), the PBC adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implemented the decisions of the CPC Central Committee and the State Council, and followed the new development philosophy. Working with other relevant departments, we have improved the regional financial policy system, actively provided financial support for the country's major regional development strategies, and continuously enhanced regional development coordination.

First, we have developed a dialectical approach to thinking and promoted regional economic planning featuring complementary advantages and high-quality development. General Secretary Xi Jinping has emphasized on several occasions that imbalances are common, and we should pursue a relative balance between regions — this is a dialectical approach to coordinated regional development. On one hand, serving the implementation of China's major regional development strategies, the PBC has given full play to the functions of the central bank, and deployed financial vehicles to support coordinated development in the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta, ecological protection and high-quality development in the Yellow River basin, and the construction of the Chengdu-Chongqing Twin City Economic Circle. We have guided financial institutions to improve financial service innovation, and promoted leveraging the role of city clusters in driving growth. On the other hand, we have flexibly tapped into monetary and credit policy tools, made full use of financial technology, and actively carried out pilot programs for the reform and innovation of modern inclusive finance and green finance, built and improved a modern inclusive financial system and green financial system, and guided rural areas and underdeveloped areas to make up for their weaknesses, and promoted green, low-carbon and high-quality economic development.

Second, we have adhered to a problem-oriented approach, formulated differentiated policies tailored to local conditions, and provided category-specific guidance. According to the characteristics and comparative advantages of different regions, targeted pilot regional financial reforms have been carried out. Positive results have been achieved in fields such as inclusive finance, green finance and science and technology finance, giving rise to a set of practices that can be applied in other areas.

Third, we have taken into account both domestic and international dynamics and leveraged these two markets and resources. The pilot free trade zones are pacesetters of reform and opening up in the new era, and testing grounds for a high level of financial openness, which serve as a platform for tapping into both domestic and international resources. Among the 21 pilot free trade zones and Hainan Free Trade Port approved by the State Council, financial liberalization and innovation is one of the highlights, covering important elements such as the facilitation of cross-border investment and financing, the optimization of financial institutional arrangements and the innovation of cross-border financial services.

Next, the PBC will actively implement the guiding principles of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. As China enters a new development stage, we will follow a new development philosophy, foster a new development paradigm and pursue higher-quality growth. We will continue to bolster financial support for coordinated regional development, and advance regional financial reforms with distinctive features.

First, we will continue to increase financial support for the country's major regional development strategies. In accordance with local conditions, financial support will continue to be provided to promote the implementation of various strategies, including coordinated development in the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta, ecological protection and high-quality development in the Yellow River basin, and the construction of the Chengdu-Chongqing Twin City Economic Circle. We will enhance the quality and effectiveness of financial services for the real economy and coordinated regional development.

Second, we will continue to make overall planning and work on pilot zones for regional financial reform. Financial reform and innovation with regional characteristics will be strengthened. We will select eligible areas to promote pilot projects covering such areas as technology innovation finance, inclusive finance and green finance, and explore effective ways of providing financial support for high-quality development such as scientific and technological innovation, rural vitalization and green development.

Third, we will continue to promote financial liberalization and innovation in the pilot free trade zones and promote domestic and international circulations reinforcing each other. Starting from serving the real economy and promoting the liberalization and facilitation of trade and investment, we will focus on providing financial support for the construction of pilot free trade zones and free trade ports, promote the full implementation of the system combining pre-establishment national treatment and a negative list, and strive to achieve a high level of opening up. Thank you everyone.

Chen Wenjun:

Thank you, Mr. Liu. The floor is now open for questions. Please state the name of your news outlet before asking your questions.

CCTV:

In recent years, PBC has carried out a series of pilot programs on regional financial reforms, – covering key fields such as green finance and inclusive finance – in the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta and other hotspot areas. What progresses have been made in these pilot programs? What experience did you gather that can be rolled out across the country? Thank you.

Liu Guiping:

Thanks for your questions. I gave a brief introduction previously, and would like to introduce some details now.

As China's central bank, PBC always follows the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the major decisions and plans of the CPC Central Committee and the State Council. In accordance with the needs of macro-economic development and deployments of regional development strategy, we promote relevant works in accordance with our functions as the central bank.

I have just introduced several major strategies regarding regional development, and perhaps you may have noticed that the order in which I said them is the order of several major strategies deployed by the Party Central Committee and State Council, including the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, the integration of the Yangtze River Delta, the ecological protection and high-quality development of the Yellow River Basin, and the Chengdu-Chongqing Twin City Economic Circle. I'd like to introduce our works on pushing forward regional development from the perspective of the five development philosophies stressed by General Secretary Xi Jinping.

First, we implemented the philosophy of innovative development. We have promoted the reform and innovation of sci-tech innovation finance and actively explored an effective model for finance to support science and technology innovation. For example, we explored six special development models at East Lake High-tech Development Zone in Wuhan city, with the aim of building investment and financing channels to serve the whole life cycle of science and technology enterprises. The development models include institution establishment, operational mechanisms, financial products, information platforms, direct financing and financial supervision. All the experience we learned has been spread across the country.

Second, we implemented the philosophy of coordinated development. We actively promoted and supported major strategies for regional development. For example, we accelerated the building of Shanghai into an international financial center and high-quality and integrated development of the Yangtze River Delta, so as to give full play to the leading role of Shanghai as an international financial center. We made great progresses in streamlining administration, delegating power, improving regulation and upgrading services of the finance industry, coordinating supervision of credit agencies, and sharing economic and financial information. At the same time, when providing financial services for the construction of Guangdong-Hong Kong-Macao Greater Bay Area, we innovated cooperation models between the Chinese mainland and Hong Kong and Macao, and promoted cross-border mobile payment facilitation, trials of account opening witness service and cross-border purchase of wealth management products by residents in the Guangdong-Hong Kong-Macao Greater Bay Area – which is now in the process of moving forward. We also upgraded financial services in the area, and achieved positive results in finance related to people's livelihoods, facilitation of cross-border investment and financing, and financial market connectivity.

Third, we implemented the philosophy of green development. We propelled the construction of pilot zones of reform and innovation of green finance in six provinces and regions. The six provinces and regions are Zhejiang, Jiangxi, Guangdong, Guizhou and Gansu provinces and Xinjiang Uygur autonomous region. By the end of last year, the loan balance of green finance in these six provinces and regions reached 236.83 billion yuan, accounting for 15.1% of their total loan balance, and 4.3 percentage points higher than the national average. Bond balance of green finance in these places reached 135 billion yuan, up 66% year-on-year. Ganzhou New Area in Jiangxi province successfully issued the country's first authenticated green municipal special bond. Huadu district in Guangzhou developed several financial products such as carbon emissions rights mortgage and pledge financing.

Fourth, we implemented the philosophy of open development. We advanced financial opening and innovation in free trade zones, and forged a new paradigm of financial innovation. At present, there are 21 free trade zones throughout China. The experience we have spread across the country include more than 10 new businesses of local and foreign currency, such as macro-prudential management of full-diameter cross-border financing with the integration of local and foreign currencies; cross-border two-way RMB capital pool of transnational enterprises and groups; and simplified RMB settlement process for regular and direct investments.

Fifth, we implemented the philosophy of shared development. We promoted reform and innovative trials for inclusive finance and micro-finance, and significantly improved the coverage and accessibility of financial services. Taizhou city in Zhejiang province and Lankao county in Henan province solved issues relating to agriculture, rural areas, and rural people, information asymmetry and difficulties faced by small and micro-businesses in accessing affordable financing by making good use of financial technology. Taizhou has earned experience in financial services for small and micro-enterprises by focusing on real entities, services for small and micro-enterprises, and utilizing an accurate supply and stable operation. Lankao explored a new development model of inclusive finance with digital service platforms as the core. Thank you.

China Financial and Economic News:

Accelerated constructionof Shanghai as an international financial center and the integrated development of the Yangtze River Deltaregion are major development strategies established by the CPC Central Committee. What has the People's Bank of China (PBC) done in this regard? Thank you.

Liu Guiping:

Thank you for your question. Mr. Wang will answer this question.

Wang Xin:

Thank you for your question. Shanghai and the Yangtze River Delta area are the regions with the most dynamic economy, the highest level of development and the highest degree of opening-up in China. Accelerating Shanghai's development as an international financial center and providing sound financial support for the integrated development of the Yangtze River Delta region are important measures in creating a new highland of high-level opening-up. Last February, when Chinese society was hit hard by the epidemic, upon the approval of the State Council, the PBC, along with the China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commision (CSRC), State Foreign Exchange Administration (SAFE) and Shanghai Municipal People's Government, released the Opinions on Further Accelerating the Development of Shanghai as an International Financial Center and Providing Financial Support for the Integrated Development of the Yangtze River Delta Region. This is a major document, which lays out 30 specific measures covering all aspects of financial reform and opening-up. Some of the key points and highlights include increasing the green assets allocation of financial institutions, since it is very important at present for these institutions to increase green financial assets, fulfill their social responsibilities, and make sustainable investments. The Opinions also promotes the integrated establishment of green financial service platforms and the integrated development of credit investigation in the Yangtze River Delta region, which as a basic task, is essential for unified economicand financial development in the region. The Opinions also states that an inclusive financial index system and an alternative dispute resolution mechanism for financial consumption disputes should be set up in the region. In addition, Shanghai and the Yangtze River Delta region, with their relatively developed finance and science and technology, lead the country with regard to science and technology innovation. For example, in terms of getting listed on the Science and Technology Innovation Board, or STAR Market, be it the enterprises applying for listing or enterprises finally getting listed on the Market, enterprises from the Yangtze River Delta region account for nearly 50% of the country's total. Such a large proportion shows us the importance of the economy and finance of the region, including Shanghai.

Next, the PBC will continue to promote implementation of the Opinions, and many measures in it need our increased efforts to be carried out more quickly. We will step up efforts to further the development of green finance, integration of credit investigation, and establishment of an inclusive financial index system and an alternative dispute resolution mechanism for financial consumption disputes in the Yangtze River Delta region to promote the region's integrated development. Thank you.

Market News International:

How will the central bank solve the problem of unbalanced distribution of credit resources among different regions? In addition, medium- and long-term loans to enterprises in China continue to rise, while investments in the manufacturing sector remain sluggish. What is the main reason for this and how can the issue be dealt with?

Liu Guiping:

Thank you for your questions. Mr. Zou will answer this question.

Zou Lan:

Thank you for your questions. We have also noticed that investments in manufacturing have been sluggish. Investments in the manufacturing sector fell by 2.2% year-on-year in 2020, for which we think there are many reasons. First, affected by the external economic environment and the COVID-19 pandemic, the liquidity of manufacturing enterprises was strained and so loans were mainly used to meet the liquidity demand. The enterprises' investment ability and confidence need to be restored.

Second, it is related with adjustments to the industrial structure. With the strong support of national policies, investments in high-tech manufacturing industries have grown rapidly, but the proportion of these industries in the whole manufacturing sector remains relatively limited.

Third, as manufacturing enterprises turn to an assets-light strategy, their investment needs have shifted. These enterprises have begun to lease, instead of purchase, plants and equipment, and the new business model of shared manufacturing is making gradual progress, which has caused relatively big changes in the enterprises' investment demands. To support the high-quality development of the manufacturing industry, the PBC, following the arrangements of the CPC Central Committee and the State Council, has strengthened macro-prudential assessment, enhanced policy coordination and cooperation, and taken multiple measures together with other financial departments in recent years, which have promoted the substantial growth of medium- and long-term loans in the manufacturing industry. At the end of this February, the medium- and long-term loan balance of the manufacturing sector stood at 5.62 trillion yuan, up by 38.8% year-on-year and registering an increasing growth rate for 16 consecutive months, reversing the previous sluggish growth rate. Financial support for the manufacturing industry is paying off, and we believe this can drive investment in manufacturing to some extent.

We have also noticed the problem of unbalanced credit supply in different regions. We are analyzing the relevant issues and will take appropriate measures to solve the issue. Thank you.

Jiemian News:

The fifth plenary session of the 19th CPC Central Committee proposed establishing a modern central banking system. The modern monetary framework is an important part of modern central banking system. What aspects are the PBC considering for improving the modern monetary framework to support high-quality development during the 14th Five-Year Plan period? Thank you.

Liu Guiping:

Thank you for your question. I'd like to invite Mr. Sun Guofeng to answer this question.

Sun Guofeng:

Thank you for your question. The fifth plenary session of the 19th CPC Central Committee proposed that the 14th Five-Year Plan set the promotion of high-quality development as its theme. As such, the currency value must be kept stable and a sound monetary and financial environment can be provided for high-quality development. The monetary policy should be in accordance with the ultimate target stipulated by the Law of the People's Bank of China, which is "maintaining the stability of the currency value and thereby promoting economic growth." Keeping the currency value stable has both internal and external meanings. The internal meaning is to maintain price stability and to manage liquidity well. The annual Central Economic Work Conference in 2020 and the Outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-Range Objectives Through the Year 2035 clearly state that the intermediate goal of monetary policy is maintaining the growth rate of money supply, and social financing basically matching the nominal economic growth rate, thus specifying the "anchor" of the monetary policy framework. In recent years, the PBC has promoted the quoted interest rate in the loan market, which is the loan prime rate (LPR) reform, and the transmission efficiency of monetary policy has been significantly improved. As the benchmark rate in the credit market, LPR has played an important role in adjusting credit supply and demand, thereby affecting the money supply. Maintaining LPR at a reasonable level is conducive to stabilizing the "anchor" of the money supply. Therefore, LPR is not only an important part of the market-based interest rate formation and transmission mechanism, but also a key component of the money supply control mechanism. LPR is formed based on policy rate quotes. By improving the policy rate system which employs the open market operations (OMOs) rate as the short-term policy rate and employs the medium-term lending facility (MLF) rate as the medium-term policy rate, the PBC has guided the market rate represented by DR007 to hover around the policy rate. The PBC has also improved the market-based interest rate formation and transmission mechanism from policy rate to LPR to the effective interest rate on loans, and by joining with improvements on money supply control mechanism as an organic whole, it has established the modern central banking system.

The external meaning of maintaining currency value stability is to keep the RMB exchange rate basically stable at an appropriate and balanced level. As such, it is necessary to enhance the RMB exchange rate flexibility, strengthen the macro-prudential management of cross-border capital, guide social expectations, and strike a balance between internal and external equilibriums. Thank you.

Hong Kong Economic Herald:

What is the progress of the cross-border digital currency project being jointly promoted by the PBC and the Hong Kong Monetary Authority? During the 14th Five-Year Plan period, what measures will the central bank take to support Hong Kong in consolidating its position as an international financial center? Thank you.

Liu Guiping:

Mr. Wang Xin will answer this question.

Wang Xin:

Thank you for your question. China's digital renminbi (RMB) is mainly designed for domestic retail payments. However, when the conditions are suitable, if there is such a demand in the market, the use of digital RMB for cross-border transactions can also be accomplished. In the early stages, the PBC's digital currency research institute and the Hong Kong Monetary Authority (HKMA) conducted technical tests on the cross-border use of digital RMB in the mainland and Hong Kong, which was a routine R&D test for the RMB pilot. The digital RMB is being tested in several regions and scenarios across China, including at the Winter Olympic Games. There have been more and more diverse test scenarios for the digital RMB. At the same time, we have also been working with the HKMA to carry out certain technical tests on its cross-border use. Recently, with the support of the Bank for International Settlements' Innovation Hub Hong Kong Centre, the PBC's digital currency research institute and the HKMA, the Bank of Thailand and the United Arab Emirates have jointly initiated a research project on multilateral central banks' digital currency bridges, which aims to explore the use of distributed ledger technology to realize round-the-clock simultaneous settlement in cross-border transactions of central bank digital currency pairs, that is payment-versus-payment (PvP) link. Central bank digital currency has been a hot topic internationally. Many central banks have been conducting research and explorations, and similar cooperation projects have been carried out between different central banks. So, the PBC has also been exploring the feasibility of digital RMB. Thank you.

Yicai: 

From the latest meeting of the Federal Reserve, we can see that their monetary policy seems to be a little bit dovish, but U.S. bond yields continue to climb, and inflation expectations in the U.S. are also very strong. Now many analysts think that the Federal Reserve will raise interest rates or reduce its balance sheet in advance. Some worry that there may be spillover effects. What will be the effects? What's your opinion on that? Thank you.

Liu Guiping:

Thank you for your question. This question draws wide attention nowadays. I will invite Mr. Sun to answer this question.

Sun Guofeng:

Thank you. In 2020, China was the only major economy in the world to register positive growth and one of the few major economies to adopt normal monetary policies, which not only advanced the global economic recovery but also supported the normalization of monetary policies of other major economies. We have noticed that the U.S. treasury yield increased to over 1.75%, which drove the appreciation of the dollar. The U.S. dollar index has risen by 3.6% since the beginning of this year. Affected by that, some emerging economies face rising risks in repaying debts and refinancing. The pressure of currency devaluation amounts. Some economies raise their interest rates and fluctuations occur in the financial market. China has always stuck to normal monetary policies. From February to April last year, we took rather strong measures in response. After May of 2020, the monetary policies returned to normal, which greatly bolstered anti-epidemic prevention and control, and social and economic development, while not resorting to a deluge of excessive stimulus policies. We can see that China's national debt yield has remained stable since the recovery, and the free floating of renminbi exchange rate has become a normality, which serves as an automatic stabilizer for the macro economy and international balance of payment. Therefore both the massive monetary stimulus measures introduced by the Fed last year and future adjustments to monetary policy by the Fed will have relatively little impact on China's financial markets. In fact amidst the recent sharp volatility in global financial markets, especially in emerging economies, China's financial markets are running smoothly, the RMB exchange rate is floating freely and the 10-year Treasury yield is currently around 3.2%, which is still lower than the previous period. The positive effects of China's normal monetary policies have been delivering results. As the next step, the key is to get our own affairs in order. We will adopt stable monetary policies, retain our focus, and cherish the space for normal monetary policy. Meanwhile, we will keep a close eye on changes to the international economic and financial situation, increase the exchange rate's flexibility, coordinate international macro policies in line with China's conditions, and maintain a good macro policy leadership posture. We are pleased to see other economies seeking to return to normal monetary policy, which is beneficial to the long-run sound development of global economy. Thank you.

CNBC:

I have two questions. My first question is regarding real estate debt and the stock market. Which represents the bigger financial challenge and what measures will be taken? The second question is about the digital currency issued in Beijing and Chengdu this year. What achievements have been made and what adjustments are needed? Thank you.

Liu Guiping:

Thank you for your question. The first question concerning challenges and relevant markets goes to Mr. Zou. The second question regarding digital currency goes to Mr. Wang.

Zou Lan:

Thank you for your question. Over the past three years, according to the decisions and arrangements of the CPC Central Committee and the State Council, under the coordination of the Financial Stability and Development Committee under the State Council, the financial system has fully enforced all tasks and plans in the critical battle to forestall and defuse financial risks, and achieved results in the current stage. On the whole, the risks of the financial system have tended to shrink. China's financial risks are accumulated over many years and caused by systematic, mechanistic, cyclical and behavioral factors. Currently, the macro environment remains complex and severe, and the fluctuations of international capital flow are large due to the uncertainty brought by the epidemic. Shocks overseas cause fluctuations in the domestic financial market. The stock market, bond market, and bulk commodities market are exposed to the risks of oscillation. A small number of large-scale enterprise groups are still in a period of risks being exposed. Middle and low-quality enterprises still have difficulties in financing and the debt default risk is relatively high. The upward pressure on property prices is still large in some popular cities. Potential risks such as debt default among highly-leveraged medium- and small-sized real estate enterprises worth watching.

Facing the risks, in the next stage of normalizing the forestalling and defusing of financial risks, the financial management department will focus on key sectors and resolve existing risks. We will also improve mechanisms and systems, and perfect the financial risk prevention system and early warning system, to increase the activeness and foreseeability in financial risk prevention and control with a holistic view. We will resolutely guard against systemic risks to provide a good financial environment for sustained economic recovery and high-quality development.

Thank you.

Wang Xin:

The market has a great deal of interest in the digital RMB, and there is a great deal of concern. On the one hand, this has to do with the fact that more and more central banks around the world are getting involved in developing their own digital currencies. On the other hand, it may also be related to the jump in the prices of Bitcoin some time ago. The People's Bank of China has steadily promoted research, development and testing of the digital RMB, with more and broader test regions and test scenarios, and accumulated good experience. Generally speaking, the feedback from participating institutions and participating localities has been positive. For instance, the digital RMB red envelope during the Spring Festival was a good example. The digital RMB is getting closer to us, and we need to further enrich relevant scenarios and accumulate more experience. Next, we will further promote the digital RMB pilot programs and gather more experience. Thank you.

Bloomberg:

I have two questions and the first is regarding foreign outflows. As U.S. Treasury yields keep rising, is China worried about capital withdrawals of foreign and domestic investors from China's capital market? And do you have a response plan for this? Secondly, the Chinese government proposed reducing the government's leverage ratio. How does the monetary policy support this goal? Thank you.

Liu Guiping:

For these two questions, I will ask our two directors to answer separately. Regarding considerations about the impact of the reduction in the yields of treasury bonds on our entire market, Mr. Zou Lan, head of the Financial Market Department of the PBC, can you please answer it? Mr. Sun Guofeng from the Monetary Policy Department of the PBC can answer the latter question.

Zou Lan:

With regard to the bond market, we have been paying close attention to the operation of the bond market, including the situation of foreign investors investing in the Chinese bond market, as it continues to open up. Over the past few years, China's bond market has developed relatively quickly, with the balance reaching 118 trillion yuan at the end of February, ranking second in the world in terms of scale. China has a variety of bond varieties and also has complete trading tools, with expanding market depth and scale. Amid furthering opening up to the outside world, we have continuously improved the trading and settlement mechanisms of the bond market while drawing on rules of the international market. This has provided a more friendly and convenient investment environment for overseas investors.

Therefore, based on this situation, we feel that China's bond market still shows strong resilience and certain risk-aversive characteristics. From the data, we also observed that by the end of February, the scale of domestic bonds held by foreign institutions had reached 3.7 trillion yuan, a year-on-year increase of 62%. Overseas investors are mainly mid-to-long-term portfolio investors such as central banks and sovereign funds, so their holdings of Chinese bonds are relatively stable. In addition, the proportion of foreign investors' holdings in the bond market isn't high, and is now 3.1%, which is still relatively low compared with mature international markets.

We think that precisely because of these characteristics, FTSE Russell finally confirmed that China's bonds will be included in the FTSE World Government Bond Index (WGBI) a few days ago. Next, we will actively improve relevant policies and systems, and continue to promote the opening up of the bond market. That's my answer, thank you.

Sun Guofeng:

Let me answer the second question. When I introduced the framework of modern monetary policy, I talked about the 2020 Central Economic Work Conference, the Outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-Range Objectives Through the Year 2035. It is clear that the intermediate goal of monetary policy is to ensure that the growth rate of money supply and the scale of social financing basically tally with the growth rate of the nominal economy. This is an anchor of the monetary policy framework. We should see that trend of the growth rate of money supply and the scale of social financing and the growth rate of debt are basically the same. Therefore, this anchoring method of the monetary policy framework actually embeds the mechanism of stabilizing the macro leverage ratio into the monetary policy framework, which is a manifestation of the cross-cycle policy design concept proposed by the fifth plenary session of the 19th CPC Central Committee, and conducive to achieving the long-term balance of stable growth and risk prevention. That is to say, if monetary policy achieves the intermediate goal and keeps the growth rate of the money supply and the scale of social financing basically matching the nominal economic growth rate, the macro leverage ratio can be basically maintained. Thank you.

Red Star News:

Chengdu and Chongqing are currently accelerating the construction of a financial center in western China. In the next step of regional financial reform, will the People's Bank of China make new arrangements for the Chengdu-Chongqing Twin City Economic Circle? Will there be regional financial policy support? At the same time, I have also paid attention to the recent exposures of consumer loan variants such as the "betrothal gift loan" and the "cemetery loan" by small and medium-sized banks. Will the central bank regulate the behavior of small and medium-sized banks and how will they be regulated? Thank you.

Liu Guiping:

In fact, you have also raised two questions. The first question is about the certain considerations on the construction of the Chengdu-Chongqing Twin City Economic Circle. I will invite Mr. Wang Xin to answer it. The latter one is also a recent hot topic, involving some views on the innovation of related credit products. I will ask Mr. Zou Lan to answer it.

Wang Xin:

Thank you for your question. The construction of the Chengdu-Chongqing Twin City Economic Circle is a major strategic deployment made by the CPC Central Committee with Comrade Xi Jinping at its core. It is a major regional development strategy. Deputy Governor Liu also just introduced a number of major regional development strategies, including the Guangdong-Hong Kong-Macao Greater Bay, the Yangtze River Delta, the Beijing-Tianjin-Hebei region, and the Xiong'an New Area. The Chengdu-Chongqing Twin City Economic Circle is another major regional development strategy, that is of great significance for further promoting the development of western China, and accelerating the economic and financial development of the western region. The People's Bank of China has done a lot of work in the building of the Chengdu-Chongqing Twin City Economic Circle. According to the deployment of the CPC Central Committee and the State Council, the central bank actively participated in the drafting and compilation of the outline for the construction of the twin-city economic circle in Chengdu-Chongqing region, and the in-depth research on financial-related issues. At the same time, we are now working with relevant departments, as well as those of Sichuan province and Chongqing municipality, to further study the major strategic deployment of financial support for the Chengdu-Chongqing Twin City Economic Circle and support for Chengdu and Chongqing to jointly build a western financial center. Chongqing and Chengdu have different development characteristics, and each has its own characteristics in terms of finance. Therefore, when we research and formulate financial support policies, we will give better play to their respective characteristics on the basis of commonality and integrated development. We will further explore innovative measures for financial reform and opening up, and better promote the development of the Chengdu-Chongqing Twin City Economic Circle. Thank you.

Zou Lan:

I will answer your second question. Loans for "engagement gifts" and "graveyard purchase" have caused a stir. We believe that some banks, under the banner of so-called financial innovation, are challenging social pain points, leading people to over-indebtedness, touching the bottom line of public order and good morals, and detracting from the intended function of finance serving the real economy. These loans are in essence consumer loans, which are advertised to gain customers through the creation of gimmicks. It also reflects the lack of service capabilities of some small and medium-sized banks and some difficulties faced by financial development. Therefore, we should pay attention to the issue, even though it is caused by the behaviors of individual banks. We consider the issue from three aspects.

First, we will continue to supervise financial institutions to optimize their credit structure, focus on micro, small and medium-sized enterprises, and adhere to the duty of serving the real economy. 

Second, the PBC will continue to work with the CBIRC and some other government departments to supervise and guide the financial innovation of small and medium-sized banks and business services access. Under controllable risk and prudent regulation, the PBC will support financial innovations by banks and rectify illegal acts that are against the public order and good morals as well as major guidelines and policies.

Third, the PBC will take multiple measures to improve the abilities of small and medium-sized banks to serve the real economy and ensure that those banks have the capability, willingness and know-how to offer financial loans. This is my answer.

Liu Guiping:

I'd like to also add a few words. I am very grateful to our friends from the media for their supervision and reporting on financial services and innovation. It helps us keep abreast of relevant information to innovate products and provide high quality services for the real economy as well as for urban and rural residents. Thank you.

China Daily:

We are also concerned about financial support for the development of the real economy. Under the background of fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, what policies will financial supervision departments introduce to support high-end manufacturing? What new measures will be taken to promote the upgrading of the overall manufacturing level? Thank you.

Liu Guiping:

I will pass the question to Zou Lan, head of the financial market department at the PBC, to explain this for the journalist.

Zou Lan:

Thank you for your question. As we know, the manufacturing industry is the main body of national economy. Improving the strength of the manufacturing industry will lay an important foundation for fostering a "dual circulation" development paradigm. In line with the decisions of the CPC Central Committee and the State Council, the PBC and other financial supervision departments have taken multiple measures to fuel growth in medium and long-term loans in recent years, and I have just briefly introduced some new data.

The requirement to raise the proportion of loans to the manufacturing sector is clearly stated in this year's government work report. Next, we will carry out this requirement in three aspects:

First, we will urge and guide financial institutions to optimize the credit structure of the manufacturing industry, to clarify the objectives and tasks of "increasing the proportion of loans to manufacturing industries" and "maintaining a reasonable growth rate of medium and long-term loans to high-tech manufacturing industries." We will guide financial institutions to increase credit supply to high-tech manufacturing and strategic emerging industries, while also supporting the equipment renewal and technological upgrading in traditional manufacturing industries.

Second, we will improve financial services for high-tech manufacturing. We will guide financial institutions to develop skills of industry analysis and risk assessment in line with the features of the high-tech manufacturing industry such as light-assets, high intelligence, high-risk and high returns. We will boost their capacity to increase product and service innovation such as investment and loan linkage, intellectual property pledge loans and supply chain finance. We will optimize internal management mechanisms and channel more credit resources into the high-tech manufacturing industry.

Third, we will support financial services for enterprises and industries aiming for breakthroughs in key and core technologies. We will provide financial services for enterprises undertaking major national scientific and technological innovation tasks, while upholding market-oriented and law-based principles. Thank you.

Liu Guiping:

There is actually a big issue in the former part of your question just now. I did not miss it, so I had invited the head of the Financial Market Department to respond to it first. Regarding the PBC's policies on the regional development strategy and possible future ones, I will quickly brief you.

On one hand, we have introduced special financial policies to support regional development together with relevant government departments in accordance with the overall strategic arrangement of the CPC Central Committee and the State Council. The policies involve the coordinated development of the Beijing-Tianjin-Hebei region, the construction of the Xiongan New Area, the integrated development of the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the construction of Hainan Free Trade Port. On the other hand, we are working on policies to support the Chengdu-Chongqing Twin City Economic Circle in financial terms and their joint construction of a financial center in western China, together with relevant government departments. Related work is underway.

In short, the PBC will effectively perform its functions as the central bank in light of the country's established regional development strategy, and support and facilitate its implementation, both in accordance with the overall requirements of following a new development philosophy and fostering a new development paradigm to achieve high-quality development as China enters a new development stage. In particular, the PBC will effectively help foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, to benefit the Chinese people and the world more. Thank you.

CNR:

China has achieved positive results in building a green financial system since the 18th CPC National Congress, and is highly expected to fulfil the goal of peak carbon emissions and eventually achieve carbon neutrality. How will you help achieve that goal by better playing the role of green finance? Thank you.

Liu Guiping:

Thank you for your question. The PBC has always attached great importance to developing green finance and putting into action General Secretary Xi Jinping's thinking on promoting ecological progress and the concept of "lucid waters and lush mountains are invaluable assets." I mentioned some of our explorations in developing green finance when making the overall introduction, especially the pilot zones for green finance reform and innovation in nine localities of six provinces and autonomous regions. Since you asked about it, I would like to generally brief what we have done and what we will do.

Our work so far has mainly focused on the three major functions of finance in supporting green and low-carbon development: resource allocation, risk management, and market pricing. We have formed five pillars of green finance so far: a standard system of green finance, requirements for the supervision and information disclosure of financial institutions, a system of policy incentives and restraints, a system of green finance products and market, and international cooperation in green finance.

As the next step, in line with the peak carbon emissions and carbon neutrality targets set by General Secretary Xi Jinping during his participation in a relevant international event in September last year, we are taking the following measures.

First, we are putting in place the work to achieve peak carbon emissions and carbon neutrality, and carrying out carbon accounting step by step. One of the core, fundamental and difficult tasks is to explore the establishment of a national carbon accounting system. We have already started this work.

Second, we are strengthening the restraint mechanism based on information disclosure. We already issued a notice to the pilot zones for green finance reform and innovation, encouraging financial institutions to disclose environmental information. We also motivated listed companies, financial institutions, bond issuers, and key emission organizations to share environmental information with each other.

Third, we are playing the role of the market. A very important function of green finance out of the three as mentioned just now is price discovery. To realize this function, it is necessary to build a unified national carbon emission trading market. The market should embody more financial attributes, while finance supports and coordinates with the market.

Fourthly, with energy restructuring as the core, we will create carbon emission reduction policy support tools that directly reach the real economy. Our relevant departments and bureaus have already started to explore and study this area, and we will release relevant information to the public after yielding outcomes.

In addition, the PBC has launched a green financial performance evaluation of financial institutions in order to better promote the development of green finance. We are improving this evaluation system in the hope of establishing a better mechanism to promote financial institutions to support green and low-carbon development in an effective, strong and orderly manner, and to promote the achievement of peak carbon emissions and carbon neutrality.

Fifth, we will do a better job of risk prevention and control. We have decided to gradually incorporate climate change-related risks into the macro-prudential policy framework.

Sixth, we are further deepening international collaboration. China once again became the co-chair of the G20 Sustainable Finance Study Group this year. We will play this role and take the lead together with the U.S. Treasury Department to motivate the G20 to do more in sustainable finance. We will strive to work out a common green finance taxonomy together with the EU within the year. We will strictly control investment in new coal power projects overseas by further implementing the Belt and Road green investment principles. As you may have noted, China has the world's largest green loan balance and the world's second largest green bond market, and the quality is good, with not a single case of default so far.

Seventh, we are furthering pushing forward the construction of pilot zones for green finance reform and innovation. Besides those already constructed in nine localities of six provinces and autonomous regions, we will construct pilot zones in more localities to help realize the goal of peak carbon emissions and achieving carbon neutrality.

There are still many things that need to be done and many issues that need to be explored and studied in green finance. We will further strengthen international collaboration embodied with Chinese characteristics, and further put into action Xi Jinping's thinking on promoting ecological progress and fully implement the concept of "lucid waters and lush mountains are invaluable assets." Thank you.

Chen Wenjun:

Thanks to all our speakers and friends from the media. Today's press conference ends here.

Translated and edited by Xu Xiaoxuan, Zhou Jing, Yan Xiaoqing, Li Huiru, Liu Jianing, Fan Junmei, Wang Mengru, Liu Qiang, He Shan, Zhang Rui, Wang Qian, Zhang Jiaqi, Wang Wei, Wang Yiming, Yang Xi, Lin Liyao, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Zhang Jianhua, administrator of the National Energy Administration (NEA)

Li Chuangjun, director of the New Energy and Renewable Energy Sources Department of the NEA

Li Fulong, director of the Development and Planning Department and spokesperson of the NEA

Huang Xuenong, director of the Electric Power Department of the NEA

Chairperson:

Xing Huina, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

March 30, 2021

Xing Huina:

Friends from the media, good morning. Welcome to this briefing held by the State Council Information Office. Today, we have invited Mr. Zhang Jianhua, administrator of the National Energy Administration (NEA) to brief you about China's renewable energy development and take your questions. We also have with us Mr. Li Chuangjun, director of the New Energy and Renewable Energy Sources Department of the NEA; Mr. Li Fulong, director of the Development and Planning Department and spokesperson of the NEA; and Mr. Huang Xuenong, director of the Electric Power Department of the NEA.

Next, I will give the floor to Mr. Zhang.

Zhang Jianhua:

Ladies and gentlemen, friends from the media, good morning.

It is my pleasure to meet you here and brief you on China's renewable energy development. First of all, on behalf of the NEA, I would like to express my sincere gratitude to our friends from the media who have shown understanding and support for China's energy industry.

Renewable energy is a green, low-carbon energy source and constitutes an essential part of our diversified energy supply system. It plays an important role in improving the energy structure, protecting the environment, addressing climate change, and promoting sustainable development.

China's renewable energy industry has gone through an extraordinary development process since the founding of the People's Republic of China (PRC) in 1949, by starting from scratch and becoming stronger and stronger. This is thanks to the attention shown by the Central Committee of the Communist Party of China (CPC) and the State Council, as well as the function of Renewable Energy Law. In recent years, especially since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee, the energy industry has thoroughly implemented Xi Jinping thought on eco-civilization and a new energy security strategy featuring "Four Reforms and One Cooperation" (one reform to improve the energy consumption structure by containing unnecessary consumption; one reform to build a more diversified energy supply structure; one reform to improve energy technologies to upgrade the industry; one reform to optimize the energy system for faster growth of the energy sector; comprehensive cooperation with other countries to realize energy security in an open environment). It has acted with unity, tackled difficulties, and taken vigorous measures to achieve the leapfrog development of renewable energy, thus scoring remarkable accomplishments.

First, China has topped the world in renewable energy production and utilization, providing robust support for the transition to green and low-carbon energy. The installed capacity of power generation has grown rapidly. By the end of 2020, the total national installed capacity of renewable energy generation reached 930 million kW, accounting for 42.4% of the total installed capacity, an increase of 14.6 percentage points compared with that of 2012. Of this, the installed capacity of hydropower reached 370 million kW, wind power reached 280 million kW, solar photovoltaic (PV) power reached 250 million kW, and biomass power reached 29.52 million kW, ranking first in the world for 16, 11, six and three consecutive years respectively.

The utilization level has continued to improve. In 2020, China's renewable energy generation hit 2.2 trillion kWh, accounting for 29.5% of the total electricity consumption of the whole society, up by 9.5 percentage points from 2012. On this basis, non-fossil energy accounted for 15.9% of the total primary energy consumption, and China honored its commitment for non-fossil energy to account for 15% of its total primary energy consumption by 2020. Currently, renewable energy accounts for around 40% of the total installed capacity, and 30% of power generation. China boasts the world's highest installed capacity of renewable energy.

Second, technology and equipment has been significantly upgraded, injecting powerful impetus into the development of renewable energy. We have established a relatively complete industry system of renewable energy technology. 

China is now able to independently design and manufacture the world's largest one-million-kW hydroelectric turbine, and the country leads the world in the design and construction of ultra-high dams and large underground caverns. Our low-speed wind power technology is among the world's most advanced; more than 90% of China's installed wind power generating capacity relies on domestically manufactured wind turbines; and the country has started trial operations of an offshore wind turbine with a capacity of 10 MW. 

Our PV power technology has developed rapidly, and China continues to establish new world bests in the conversion efficiency of solar PV cells. China dominates the global PV power industry. Seven of the world's top 10 PV module manufacturers are Chinese companies. Integrated manufacturing across the whole industrial chain has driven a continuous decline in the costs of electricity from wind and solar PV. In the past decade, the average cost of electricity per kWh generated in onshore wind power and solar PV power projects reduced by 30% and 75% respectively. 

The renewable energy technology sector has become more competitive, creating a strong momentum in the development of new models and new forms of business related to renewable energy.

Third, remarkable achievements have been made in reducing pollution and carbon emission, consolidating the foundation for the development of an eco-civilization. In 2020, the scale of renewable energy development and utilization in China reached 680 million tonnes of standard coal, equivalent to replacing nearly 1 billion tonnes of coal, reducing carbon dioxide, sulfur dioxide and nitrogen oxide emissions by about 1.79 billion tonnes, 864,000 tonnes and 798,000 tonnes respectively. This has provided a solid guarantee for winning the fight against air pollution. Meanwhile, China has actively promoted the clean use of biomass energy such as organic waste in urban and rural areas to improve the living environment. Also, China has actively explored efforts to integrate the control of desertification, the photovoltaic power generation and the agricultural development. By integrating photovoltaic power generation and ecological restoration, China has successfully coordinated the development and utilization of renewable energy with eco-civilization development. 

Fourth, renewable energy development has delivered great benefits to the people, contributing to poverty reduction. While extending power grids to areas without electricity, China has also actively launched independent renewable energy supply projects, bringing green electricity to over one million people previously without access to electricity. Since 2012, 31 large hydropower stations with a combined capacity of 64.78 million kilowatt have broken ground to support local economic development and facilitate poverty reduction for relocated residents. China has also launched an innovative scheme to develop photovoltage projects for poverty alleviation. Under the scheme, photovoltaic power stations with an installed capacity of 26.36 million kilowatt have been completed, benefiting nearly 60,000 poor villages and 4.15 million poor households. Economic benefits from these projects amounted to 18 billion yuan each year. This has resulted in the creation of 1.25 million welfare jobs. The scheme has now become a quality example of poverty alleviation through business development and one of China's ten finest projects for targeted poverty alleviation. 

Fifth, international cooperation continues to expand, making China's contribution to join hands to address climate change. As the world's largest renewable energy market and equipment manufacturer, China has continued to deepen international cooperation in the field of renewable energy. Our domestic hydropower business has spread to many countries and regions around the world, and the photovoltaic industry has supplied more than 70 percent of the components for the global market. The wide use of renewable energy in the Chinese market has brought down the cost of renewable energy at a faster speed and thus further driven renewable energy development and utilization in other countries. In this way, the world's transition to green energy has accelerated. Besides, in recent years, China has continuously increased renewable energy investment in countries and regions along the Belt and Road to help less developed countries and regions adopt advanced green energy technologies and contribute China's wisdom and strength to the high-quality joint building of a green "Belt and Road."

Ladies and gentlemen, journalists from the media, 

In his important speeches recently, General Secretary Xi Jinping has made it clear that China will strive to peak carbon dioxide emissions by 2030, achieve carbon neutrality by 2060, increase the share of non-fossil fuels in primary energy consumption to around 25 percent, and bring its total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030. This has further clarified the strategic direction for China's energy transformation and reform and set a new aim for China's renewable energy development. Next, the NEA will step up the implementation of carbon peaking actions in the energy field and set more proactive goals for new energy development. We will vigorously advance renewable energy development in the new era, expanding its scale, increasing its share, improving its quality and making it more market-based. We will accelerate efforts to replace fossil fuels with renewable energy and improve the capacity to absorb and store new energy. We will actively build a new type of electricity system dominated with new energy and make mechanisms and policies more favorable for the whole society to jointly develop and utilize renewable energy. We will vigorously develop renewable energy to turn it from a fresh force in the transition to green and low carbon energy to the main force in achieving peak carbon emissions and neutrality, providing a solid guarantee for building a clean, low-carbon, safe and efficient energy system.

Next, my colleagues and I will answer your questions.

Xing Huina:

Now you can raise your hands and ask questions. 

National Business Daily:

The goal of carbon neutrality will promote the large-scale development and utilization of renewable energy. The growing scale of renewable energy installations and electricity generating capacity has highlighted concern over how to avoid wastage of wind and solar power capacities. How will the NEA ensure the safeguard mechanism for electricity consumption? Thank you.

Zhang Jianhua:

Mr. Huang Xuenong will take the question.

Huang Xuenong:

This is a very good question. We are promoting renewable energy under the carbon peak and neutrality strategy. However, the huge waste from wind and solar power generation capacities cannot be ignored. For this reason, people from all sectors of society are very concerned about the consumption of renewable energy. In recent years, the mismatch between the development of new energy and the consumption capacity of the power system gave rise to prominent waste problems from wind and solar power. Starting in 2018, the NEA formulated a three-year action plan for clean energy consumption. From 2018 to 2020, the waste from wind and solar power has declined year by year, and the utilization rate of wind and photovoltaic power has increased significantly. By 2020, the wind power utilization rate had reached 97%, and solar power stood at 98%. When compared with other countries around the world, these are globally leading rates. 

Next, we will promote new energy as the main source of electricity supply to realize the objectives of the carbon peak and neutrality strategy. We will develop new electricity systems and take various measures to ensure high-levels of renewable energy consumption. The NEA will take the following three measures:

First, we will coordinate and improve the layout of new energy development. While meeting the demands for carbon peak and neutrality, taking into account local conditions of new energy resources in different regions, including land construction conditions, and especially making full use of the relatively large consumption capacity for new energy in central and eastern regions, we will step up efforts to boost local development and the utilization of new energy. In western and northern regions, where new energy resources are concentrated, we should scientifically plan and establish a group of power supply bases and power transmission channels that are dominated by new energy so as to realize the optimal overall configuration of new energy power.

Second, we should enhance the flexible adjustment capacity of the electric power system, which connects power generation and electricity users. In the past, our power generation facilities would adjust to meet customer demand, with power generation, electricity transmission and utilization all done simultaneously. The situation changed after large-scale new energy was connected to the grid. New energy generation is dependent on the weather, while users need reliable electricity supply. Integrating and connecting these two sides requires construction of a new type of power system to provide the ability for flexible adjustment to allow better consumption of new energy. In terms of power generation, we will increase efforts to enhance the flexibility of thermal power generation, including the construction of pumped storage power stations and peak-regulating natural gas power stations. Regarding power grids, we will step up infrastructure construction and enhance our ability to optimize resource allocation, and in particular give full play to the complementarity between large power grid s. In terms of users, we will promote terminal power replacement, especially green power replacement, to improve the response capacity on the demand side. In addition, we will accelerate the large-scale development of energy storage, promote overall digitalization of the power system and formulate an efficient and intelligent scheduling and operation system. For example, electric vehicles need to be charged via the electric power system, which seems to be a power supply task, but they can help improve system capacity through technological developments, including taking economic measures. When the demand for electricity is low, the power system will charge electric vehicles; when demand is high, the vehicles will discharge electricity into the power system. An electric car could become a power storage device in the power system. If there are thousands of electric vehicles, it will be beneficial for the power system. Therefore, we should accelerate the construction of charging infrastructure. On one hand, this will promote the development of new-energy vehicles, and on the other, it will also facilitate the construction of a new-type power system. This is a very good thing.

Third, we will formulate a long-term mechanism for new energy consumption. I'll outline the considerations from three aspects: First, while ensuring the consumption of the power grid, various market players including power supply, power grid, users and energy storage share the responsibility of clean energy consumption through the integration and multi-energy complementation of energy resources, power grid, electricity load and storage. Second, we should coordinate the resources of electricity load, power supply and power grid, and improve the new energy scheduling mechanism and adjusting ability of the power system from multiple dimensions so as to ensure matching of the adjusting ability with the developing and utilizing scale of new energy. Third, we should set a scientific target for the rational utilization rate of new energy. A dynamic adjustment mechanism must be formed to facilitate the development of new energy and overall improvement of the new-type power system. Wind and solar power resources, grid loads and grid structures all vary in different places. We should set regional targets in line with local conditions, make full use of the system's consumption capacity, and boost the development potentials of new energy. That's all from me. Thank you.

Phoenix TV:

The Outline of the 14th Five-Year Plan and the Long-Range Objectives through the Year 2035 have formulated that the development of renewable energy resources will be accelerated. Under the guidance of the outline, what new features do you think China's renewable energy landscape will present in the future? Thank you. 

Zhang Jianhua:

Mr. Li Chuangjun, head of the new energy department, will answer this question.

Li Chuangjun:

Thank you for your question. General Secretary Xi Jinping recently said that China's carbon dioxide emissions will peak before 2030 and achieve carbon neutrality by 2060. He also set forth the requirements for the development of renewable energy. Moreover, the Outline of the 14th Five-Year Plan and the Long-Range Objectives through the Year 2035, which was recently released at the "two sessions," have set clear tasks for renewable energy development. Overall, the development of renewable energy will face new situation and new tasks during the 14th Five-Year Plan period. There will be a series of significant changes in its development in terms of boundary conditions, logic and mechanisms. All in all, the development of renewable energy during the 14th Five-Year Plan period will enter a new stage with features as follows: 

First, renewable energy will be developed on a large scale. Given the achievements during the 13th Five-Year Plan period, the average annual installed capacity for renewables will witness a substantial increase during the 14th Five-Year Plan period, and the total installed capacity will be further increased. The installed capacity using new energy will make up over 50% of the country's total by the end of the 14th Five-Year Plan period.

Second, renewable energy will grow to a significant proportion. The ratio of renewable energy to energy consumption will continue to increase. By the end of the 14th Five-Year Plan period, renewable energy is expected to account for around two-thirds of the increase in electricity consumption throughout society, and will account for more than half of the country's primary energy consumption. Renewable energy will become a principal part of, rather than a supplement to, the increase in energy and electricity consumption.

Third, the development will be marketized. The market will further play a decisive role in allocating renewable energy resources. This year, wind power and solar PV power will start to deliver electricity at a price comparable to that of conventional electricity generation methods. There will be no subsidies, and their development will be market- and competition-oriented. 

Fourth, the development will be of high quality. During the 14th Five-Year Plan period, we will step up efforts to establish a new-type power system that makes clean energy a central focus, thus to improve our consumption and storage capacities for renewable energy. We will achieve large-scale development in renewable energy, and realize high-level consumption and utilization of these energy resources, so as to ensure reliable and stable power supply, and to achieve a high-quality leapfrog development.

Going forward, we will strive for the targets of peak carbon dioxide emissions and carbon neutrality, and fully utilize our advantages in renewable energy and relevant technologies, so as to leverage our strengths and shore up our weaknesses. We will consolidate and strengthen the overall core competitiveness and competitive advantages of renewable energy. We will give continued priority to the development of renewable energy. We will pursue high-quality leapfrog development, and improve quality and efficiency through reforms and innovation. We will promote renewable energy development by optimizing regional planning, building major bases, supporting pilot projects and carrying out action plans. We will accelerate the implementation of renewable energy substitution projects, and promote a high-proportion, high-quality, low-cost and market-oriented development of renewable energy. By doing so, we will make a greater contribution to the efforts of ensuring energy supply, promoting low-carbon green development, and achieving the targets of peak carbon dioxide emissions and carbon neutrality. Thank you.  

CCTV:

The 14th Five-Year Plan period (2021-2025) is a crucial and best time for China to peak its carbon dioxide emissions. What measures will the NEA take to realize the goal of peaking emissions? 

Zhang Jianhua:

On March 15, at the ninth meeting of the Central Committee for Financial and Economic Affairs, General Secretary Xi Jinping underscored that for carbon emissions to peak and to achieve carbon neutrality requires an extensive and profound systemic reform of the economy and society, and should be incorporated into the overall task of promoting ecological progress. He called for a spirit of perseverance in achieving the goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. There are 10 years between now and 2030. The first five years, which is also the 14th Five-Year Plan period (2021-2025), is a crucial stage for low-carbon energy transformation. We will take measures in three aspects to ensure solid progress in peaking carbon emissions. 

First, we will fully develop non-fossil fuel energy. The share of non-fossil fuels in primary energy consumption will reach around 25% and China's total installed capacity of wind and solar power will exceed 1.2 billion kilowatts by 2030. General Secretary Xi Jinping made commitments to these two goals, which outline what we must achieve. We will make more active new energy development goals and accelerate the development of wind and solar power. Meanwhile, we will exploit hydropower according to local conditions and develop nuclear power in an active and orderly way under the premise of ensuring safety. We will also quicken the construction of adjustable energy supplies such as pumped power storage and new-type power storage, to increase the flexibility of electricity systems and improve new energy consumption levels. Mr. Huang also just now mentioned the consumption of new energy, which is a pressing task. 

Second, we will greatly advance the green energy use model. In order to peak carbon emissions and achieve carbon neutrality, we should take the lead in the green transformation of social and economic development across the board and promote a green energy use model in key sectors and even across the whole society. We will adopt stricter energy consumption standards and support the replacement of fossil fuel energy and reform the ways energy is consumed in key sectors such as industry, architecture, and transportation. We will push forward the development of photovoltaic integration and the green energy use model via new energy vehicles and accelerate the replacement of electric energy in heating and cooking to improve the level of electrification across the whole of society. By 2025, the energy consumption per unit of GDP and its carbon dioxide emissions will decrease by 13.5% and 18%, respectively, compared to 2020. These two goals have already been included in the 14th Five-Year Plan. 

Third, we will make and implement more effective policies and measures. According to the general arrangements of the CPC central committee and the State Council, and sincerely carrying out the guiding principles of the ninth meeting of the Central Committee for Financial and Economic Affairs, the NEA is studying various paths, targets, and measures to realize the peak in carbon emissions and carbon neutrality. We will make supporting policies and measures for key targets to bolster low-carbon energy-smart transformation, the high-quality development of new energy, the building of new types of electrical systems, and the development of new types of energy storage. At the same time, we will well connect energy planning at national and provincial levels during the 14th Five-Year Plan period and integrate those targets into the plan such as responsibilities relating to power consumption, energy-saving, and emissions reduction to peak carbon emissions. We will give full play to the guiding role of planning, define clear responsibilities for all regions and localities to reduce carbon emissions, and support regions where the conditions permit to take the lead in realizing a peak in carbon emissions. We are about to buckle down to the job now. Thank you. 

The Paper:

With the arrival of the grid-parity era, sectors involved in renewable energy no longer need subsidies but many ongoing renewable energy projects face delayed subsidy payment, resulting in operation difficulties among some companies. How will you deal with the subsidy payment backlog? Meanwhile, how can Renewable Energy Certificates (RECs) play a greater role? Thank you.

Zhang Jianhua:

Thank you for your question. It is indeed a crucial and tricky issue. We will invite Mr. Li to answer the question.

Li Chuangjun:

Thank you for your question. China has made remarkable achievements in renewable energy development over the years but there are indeed problems in the development process. These include insufficient subsidy funds and the delayed payment of renewable energy subsidies like you mentioned. China has attached great importance to solving these problems. Working with relevant departments, the NEA has actively explored various means to solve the problem of overdue subsidies. Recently, the NDRC, MOF, PBOC, CBIRC, and NEA jointly issued a notice on guidance of increasing financial support to promote the healthy and orderly development of wind power and photovoltaic power industries. The notice provides solutions for liquidity risks experienced by relevant companies that are resulted either from overdue subsidies of renewable energy or delayed payment of the subsidies. The main measures are as follows:

First, financial institutions are encouraged to negotiate with renewable energy enterprises to extend or renew loans per commercial principles. At present, some renewable energy enterprises face a relatively tight cash flow due to delays in subsidy payments, yet these subsidies do exist and are guaranteed via government credit. Therefore, we require financial institutions to extend or renew loans or adjust repayment schedules or terms according to the project's progress and cash flow based on negotiation between the banks and companies. This is to ensure liquidity to in the companies.

Second, financial institutions are encouraged to issue loans for confirmed projects that are included on the subsidy list. Earlier, the MOF and several other departments vetted the qualifications of companies on the subsidy list. For those qualified but have yet to receive a subsidy from the government, the financial institutions can determine the loan size based on subsidy certification and other credit limit increase measures, as determined by the principles of marketization and rule of law.

Third, companies are encouraged to ease interest payment burdens via the trading of RECs. Together with other relevant departments, we are studying the possibility of issuing RECs to companies based on loan contracts and other documents filed by companies. This will allow them to trade RECs to reduce the pressure of paying interest, which is also an effective means for companies to reduce their burden.

Fourth, we will work to ensure the collection of all receivables related to renewable energy surcharges. The current levy rate on renewable energy surcharges has not reached 100%. We hope to levy all receivable surcharges in the front end to expand the source and scale of subsidy incomes.

Fifth, we will optimize the management of subsidy funds. Priority will be given to granting subsidies to projects and companies that voluntarily switch to achieve grid price parity, and will simultaneously increase credit support for said projects and companies.

The above are several methods to deal with the overdue subsidies. For the next step, we will work with relevant departments to further implement various policies to gradually alleviate and finally solve the problem of new energy subsidy arrears. Thank you. 

China Electric Power News:

The construction of a new type of power system with new energy as the mainstay was initially proposed at the ninth meeting of the Central Committee for Financial and Economic Affairs. What problems will the new system mainly target? The large-scale integration of new energy into the power grid has demonstrated randomness, discontinuity and fluctuation, making it not easy to keep the real-time balance of the system. So how will you ensure the stable supply of electricity and the safety of energy? Thank you. 

Zhang Jianhua:

Thank you for your questions. Huang Xuenong, director of the Department of Electricity, will answer your questions. 

Huang Xuenong:

To achieve the goals of peak carbon emissions and carbon neutrality, we regard energy as the main battle field and electricity as the main force. The construction of a new power system proposed at the ninth meeting of the Central Committee for Financial and Economic Affairs was an inevitable decision we made to achieve peak carbon emissions by 2030 and carbon neutrality by 2060. As is the core feature of the new system, new energy will become the main source of power supply. We have to face up to the fluctuation and discontinuity of new energy which you just mentioned. In a bid to make the power system clean and low-carbon, safe and reliable, smart and flexible, and cost-effective and efficient, we will innovate in equipment technology as well as systems and mechanisms, make sure various forms of energy are interconnected and complement each other, and promote the deep integration of power generation, the grid, load and storage. Next, I will introduce the measures in five aspects. 

First, we are striving to build a power generation, supply, storage and sales system in line with the large-scale development of new energy to ensure the safety and reliability of electricity. As for how to ensure the safe supply, that is a good question. The safe supply of electricity is the bottom line for building the new power system as well as a significant task for us. Here are some measures: First, we will give play to the power grid as a platform for allocating resources. Second, we will promote the construction of the power grid at a regional level. Third, we will rationally promote the construction of supporting and fundamental power sources. Fourth, we will build a multi-layered, properly scaled, safe and reliable power system, strengthen electricity security and its capacity for resisting disasters, and steadily enhance the intrinsic safety of the electricity industry.

Second, we are concentrating efforts to improve the flexible adjustment ability of the power system. Mr. Zhang made a detailed introduction just now. When addressing the issue of idle capacity in wind and solar power, I mentioned that we will improve the flexible adjustment ability of the power system from various aspects including power supply, the grid, demand and energy storage to meet the requirements for the large-scale integration of new energy into the power grid. After the integration, wind and solar power should not lie idle in large amounts, nor the shortage of power should be allowed. We will ensure the safety of power supply. In spite of the fluctuation and discontinuity of new energy, the new system, based on its flexible adjustments, can be turned into one that is user-friendly and ensures the supply. 

Third, we are putting forth efforts to promote the interconnection and integration of power generation, the grid, load and storage, and improve the system efficiency to meet the diversified needs of various types of users. We will guide new patterns and forms of business in the electricity sector toward sustainable and sound development. Regarding the supply side, we will make various energy sources complement each other and keep them optimized. Regarding the consumption side, we will promote the deep integration of electric heating and air conditioning. We will continue to improve the service of electricity, and realize the full utilization of a high proportion of new energy and the harmonious coexistence of multiple kinds of energy sources. We will promote the interconnection between the power system and advanced information and communications technologies, develop new business patterns and improve comprehensive energy services. 

Fourth, we are striving to make technological breakthroughs in key technologies of the new power system, carry out experiments and demonstrations, and promote their application. We will promote the deep integration of electrical technology with advanced information and communications technologies including artificial intelligence, big data, and the Internet of Things to form a key technology system with our own independent intellectual property rights. We will concentrate on tackling bottlenecks in key technologies, accelerate their research, development and application, and launch innovative demonstration projects featuring the new power system. 

Another key factor is to push ahead with the establishment of the electricity market, promote innovations in systems and mechanisms, and build a market system for the new power system. We will let the market play the decisive role in allocating resources and let the government play its role better. We will accelerate the establishment of the electricity market system featuring unification, openness and orderly competition through the constant improvements of the electricity market mechanism, operating mechanism and price mechanism. That's all. Thank you. 

Beijing Daily:

The replacement of fossil energy by non-fossil energy is an important measure in promoting the low-carbon energy transition. How will the NEA accelerate the development of non-fossil energy during the 14th Five-Year Plan period? Thank you.

Zhang Jianhua:

I'll let Mr. Li Fulong answer this question.

Li Fulong:

This question is very important. Vigorously developing non-fossil energy is an important measure in promoting the transition to low-carbon energy. Just now, Mr. Zhang Jianhua gave a very clear and detailed explanation of major measures, actions and policies related to achieving peak carbon dioxide emissions and carbon neutrality in the energy sector. During the 13th Five-Year Plan period, the proportion of non-fossil energy consumption in China increased from 12.1% to 15.9%, representing an average annual increase of 0.76 percentage points.

By 2030, the share of non-fossil fuels in primary energy consumption will reach around 25%. Over the next 10 years, this should increase by 0.9 percentage points per year on average, which is equal to an average annual increase of non-fossil energy of around 70 million metric tons of standard coal. The task is indeed very arduous. The NEA is currently conducting in-depth studies and formulating relevant policies and measures to strengthen its efforts in four aspects to promote the accelerated and high-quality development of non-fossil energy.

First, we will make plans, provide guidance, and carry out regulation. We are studying and drawing up modern energy system plans and sector-specific energy plans for the 14th Five-Year Plan period, which emphasize the development of non-fossil energy and the promotion of low-carbon energy transition. Our preliminary estimates show that clean energy will account for 80% of the increase in energy consumption during the 14th Five-Year Plan period, which is 20 percentage points higher than the 13th Five-Year Plan period. Non-fossil energy will make up the majority of the increase in energy consumption. This will lay a solid foundation for achieving the target of obtaining 25% of energy consumption from non-fossil energy. At the same time, we will ensure the national and provincial energy plans are linked together to accomplish the goals and tasks of promoting low-carbon transition.

Second, we will develop non-fossil energy in diversified ways. Under the condition of ensuring safety, we will take active and orderly measures to promote the construction of coastal nuclear power stations; continue to prioritize ecological conservation; develop and construct hydropower stations mainly on key river basins such as those in southwest China and the upper reaches of the Yellow River, with the firm goal of generating over 1.2 billion kW in 2030; and vigorously develop wind and solar power generation. At the same time, it is necessary to promote the development and utilization of other renewable energy sources such as biomass and geothermal energy according to local conditions.

Third, we will optimize the layout of new energy development. On one hand, we will continue to strengthen accommodation of power generated from new energy and cross-regional transmission capacity, promote the centralized development of wind and PV power generation in an orderly fashion, and actively promote the construction of clean energy bases featuring complementary use of diverse energy sources. On the other hand, it is necessary to increase the on-site development and utilization of new energy, and actively develop distributed energy resources, in particular promote the development of distributed PV power generation and decentralized wind power in China's central and eastern regions.

Fourth, we will strengthen the flexibility and adjustment capacity of the power system. We will continue to implement the flexible transformation of thermal power. Under the condition that gas sources are guaranteed, we will develop peak-shaving natural gas power stations according to local conditions, and accelerate the construction of pumped-storage power stations as well as R&D and application of new energy storage. We must adapt to the large-scale and high-proportion development of new energy, and accelerate the construction of a new, safe and efficient power system with new energy as the mainstay. As Mr. Huang Xuenong explained, this is key to ensuring the stable operation of the power system and promoting the high-quality development of new energy. Thank you.

Kyodo News Service:

Just now Mr. Zhang talked about international cooperation, so could you make an introduction to international cooperation on nuclear power, including Hualong One? Besides, with regards to Myanmar, the China-Myanmar oil and gas pipelines are a crucial channel for China's energy imports, and some analysts believe that Myanmar's domestic economy will affect energy cooperation between the two countries, so how do you view Myanmar's situation?

Zhang Jianhua:

The technology for China's Hualong One reactor is very mature. We are cooperating with many countries, and are also vigorously promoting the technology and design in China. We want to share China's good technology and equipment with our friends around the world, and contribute to the environmental protection of the planet. China's Hualong One technology has "gone global" in a very smooth manner.

Regarding cooperation between China and Myanmar, we have paid high attention to the situation in Myanmar -- China's friendly neighbor. As for the energy industry, China and Myanmar have carried out good cooperation in this regard -- China has two pipelines in Myanmar, one natural gas line and one crude oil line. Both lines are currently in safe and stable condition. Here I'd also thank our media friends for your attention.

Hong Kong Economic Herald:

We noted that the report on renewables published by International Energy Agency in 2020 showed China was one of the main forces driving the capacity growth of the global renewable energy last year. How do you view China's contribution to world renewable energy development? Thank you.

Zhang Jianhua:

Thank you for your question. I have just mentioned that China, as the world's largest renewable energy market and equipment manufacturer, has always been committed to strengthening cooperation with other countries in the field of renewable energy, providing Chinese products, contributing Chinese wisdom and strength to the global energy transformation and green development.

We have actively taken part in global cooperation, promoting our renewable energy products, equipment and services to "go global." China has provided hydropower services for a large number of countries and regions. For example, 70% of the world's construction of hydropower stations are conducted by Chinese enterprises. We would say that Chinese workers can be seen almost at every construction site of hydropower station around the world. China's photovoltaic industry has supplied 58% of polysilicon, 93% of silicon chips, 75% of battery chips and 73% of the components for the global market. Meanwhile, China is also the world's largest manufacturer of wind turbines, as its output accounts for half of the world's total. All the above data demonstrates that China is a key player in new energy market, and, without exaggeration, it ranks first in the world.

New forms and models of business are emerging in China as the renewable energy sector scales up. We blazed a new path of poverty alleviation efforts by developing photovoltage (PV) projects in poor areas, thus providing successful experience for global poverty reduction. We have explored new patterns for controlling desertification with photovoltaic technology, and succeeded in the coordinated development of renewable energy and ecological protection. We have also promoted new business models which combines PV power generation and agriculture, fishery as well as animal husbandry. Now, we are accelerating the integrated development of renewable energy with traditional industrial sectors such as construction, transportation and industry, striving to contribute China's wisdom to innovative global renewable energy development.

Especially in recent years, China has vigorously promoted the rapid and large-scale development of renewable energy by providing legal guarantees, planning and guidance, and financial support, etc., making outstanding contributions to the global transition toward renewable energy. By the end of 2020, China's cumulative installed capacity for renewable energy had reached 934 million kilowatts, accounting for one-third of the world's total. In particular, China's newly installed capacities for wind power and solar photovoltaic (PV) power stood at about 120 million kilowatts by the end of last year, accounting for more than half of the world's newly installed capacities for both. This positions the country as a strong force for the development of global renewable energy. The large-scale development of China's renewable energy sector has also strongly promoted the rapid progress of renewable energy technologies, especially those new energy sectors represented by wind power and PV power. With costs falling fast, economic efficiency rising rapidly, and competitiveness increasing swiftly, accelerating the growth of renewable energy—especially wind power and PV power—into the world's new main energy sources is becoming reality. It is fair to say that the rapid booming of global renewable energy would not have been possible without the large-scale development of the renewable energy sector in China, and that China has made contributions to the global transition to renewable energy and climate change response. Thank you.

South China Morning Post:

Data shows a 40% year-on-year drop in China's coal imports throughout January and February earlier this year, and it is said that China has imposed a ban on imports of Australian coal. Under such circumstances, will there be uncertainties about China's coal supply this year? Thank you.

Zhang Jianhua:

Mr. Li will answer this question.

Li Fulong:

This is a very important question. First, China has been part of the economic globalization system for many years, and its economy and energy sector have been increasingly integrated into the world trade system. China follows international practices and rules regarding the import and export of important products, including coal, oil, and natural gas. Second, in terms of market demand, energy supplies must meet the needs of China's economic development and people's livelihoods. We have always adhered to open, mutually beneficial, and win-win principles of international cooperation, including the field of international coal trade you just mentioned. These guidelines and benchmarks have always been upheld and unchanging for a long time. Third, market fluctuations and changes in demand are normal phenomena. As countries around the world gradually resume production, it is normal to see changes in energy supply and demand following the effects of the COVID-19 epidemic—not only in China but also around the world. That's my brief answer.

Zhang Jianhua:

Thank you, Mr. Li, and thank you for your attention, friend from the South China Morning Post. The NEA has a very important task, which is to ensure the security of the country's energy supply. Therefore, no matter the circumstances, with the support of local governments at all levels and close cooperation with enterprises, we can effectively guarantee the safety of energy supplies. This year, there are no obvious shortfalls and we have great confidence that national energy demands in all aspects will be satisfied.

Xing Huina:

Thank you, all the speakers and friends from the media. Today's press conference is hereby concluded. Goodbye!

Translated and edited by Yuan Fang, Zhou Jing, Duan Yaying, Liu Qiang, Gong Yingchun, Chen Xia, Wang Yiming, Li Huiru, Zhang Rui, Zhang Liying, Zhang Tingting, Huang Shan, He Shan, Liu Jianing, Wang Qian, Wang Wei, Qin Qi, Yang Xi, Xu Xiaoxuan, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Yang Xiaowei, vice minister of the Cyberspace Administration of China (CAC)

Guo Ningning, vice governor of Fujian province

You Mengjun, mayor of Fuzhou Municipal People's Government

Sun Wei, a person in charge of the Department of High-Tech Industry of the National Development and Reform Commission (NDRC)

Yang Yuyan, a person in charge of the Department of Information Technology Development of the Ministry of Industry and Information Technology (MIIT)

Gou Ping, head of the Bureau of Sci-Tech Innovation and Social Responsibility of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC)

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 19, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! The 4th Digital China Summit will take place in Fuzhou, Fujian province from April 25 to 26. As in previous years, the State Council Information Office (SCIO) is holding a press conference to brief you on preparations for this summit and other related issues and field your questions.

Today we have with us: Yang Xiaowei, vice minister of the Cyberspace Administration of China (CAC); Guo Ningning, vice governor of Fujian province, You Mengjun, mayor of Fuzhou Municipal People's Government; Sun Wei, a person in charge of the Department of High-Tech Industry of the National Development and Reform Commission (NCRC); Yang Yuyan, a person in charge of the Department of Information Technology Development of the Ministry of Industry and Information Technology (MIIT); and Gou Ping, head of the Bureau of Sci-Tech Innovation and Social Responsibility of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). Next, I will give the floor to Mr. Yang.

Yang Xiaowei:

Ladies and gentlemen, friends from the media, good morning! It is a great pleasure to meet with you all again at this press conference regarding the Digital China Summit. I would like to thank all the reporters paying attention to the 4th Digital China Summit. The summit has been held successfully three times and has played a significant leading role in promoting both the application of information technology in China and digital development in Fujian.

At present, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with the joint efforts of people across the nation, China has made strategic achievement in its nationwide epidemic control. Also, China has scored a complete victory in its fight against poverty and attained decisive achievements in securing a victory in building a moderately prosperous society in all respects. With the approval of the CPC Central Committee, the 4th Digital China Summit will be held in in Fuzhou, Fujian province from April 25 to 26 this year. The summit is co-organized by the CAC, NDRC, MIIT, SASAC and Fujian Provincial People's Government; and will be hosted by the Fuzhou Municipal People's Government and relevant institutions.

The CPC Central Committee and the State Council attach great importance to the construction of Digital China. The county has specified tasks to speed up digital development and build Digital China in the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, adopted at the fourth session of the 13th National People's Congress a few days ago. At a time when China has made important strategic progress in the battle to contain the virus, and achieved positive results in coordinating the fight against the virus with economic and social development, especially in the year which marks the beginning of the 14th Five-Year Plan and the 100th anniversary of the founding of the CPC, it is of crucial significance to hold the 4th Digital China Summit. It will further encourage all sectors to actively participate in the new journey of building Digital China with enthusiasm and creativity.

The summit, themed "New Potential for Data and New Journey of Digital China," aims to serve as a platform for releasing information development policies; showcasing the latest achievements of Digital China; boosting communication regarding theories, experiences and practices of e-governance and the digital economy; and promoting cooperation with global partners in the development of Digital China and the Digital Silk Road. The summit will consist of seven sessions: the opening ceremony, the main forum, sub-forums, an achievement expo, an innovation contest, policy release, and a signing ceremony for projects. In the meantime, discussions such as "Outlook for Fuzhou" and "Minjiang Dialogue" will be held. The summit will set up a "Cloud Summit" platform, and host both online and offline events. Important guests who can't attend the main forum and sub-forums in-person will be invited to address the summit, deliver keynote speeches, or participate in dialogue via video link or pre-recorded videos. The Digital China Innovation Contest will be run online with online entry and online judging, but the prize will be awarded offline at the summit. A virtual exhibition hall will also be set up along with the achievement expo. Media outlets will be invited to live-stream or record important events at the summit. 

The 4th Digital China Summit will commence in less than a month, with preparations for the event progressing in an orderly manner. The organizing committee will strictly observe the central Party leadership's eight-point decision on improving work conduct, implement regular prevention and control measures, and adhere to the principles of frugality, efficiency and safety in organizing the summit. People from all sectors are very much welcome to participate. We look forward to the successful convening of the 4th Digital China Summit. Thank you.

Chen Wenjun:

Next, the floor is given to Ms. Guo.

Guo Ningning:

Friends from the media, good morning! I would like to thank the SCIO for organizing the press conference on this summit, and also our friends from the media and all sectors for your attention and support for the Digital China Summit. It's my pleasure to brief you on the preparations for the event. 

With three consecutive sessions successfully held in Fujian province, the summit has become an important platform for the construction and development of Digital China, and has produced positive outcomes in displaying digital innovations, communicating and implementing digital projects, and developing digital industries. Its fourth session will kick off in Fuzhou on April 25, to which the Fujian Provincial Party Committee and government have attached great importance. We will always follow the major strategy and innovative practices of Digital Fujian proposed by General Secretary Xi Jinping in 2000, and keep in mind his generous care and earnest expectations for Fujian's development, especially for Digital Fujian, and his ardent remarks on benefiting society and people with information and digital technologies. We will fully implement the spirit of the congratulatory messages from the General Secretary to the two previous sessions, and prepare for the fourth session with devotion under the thorough guidance and strong support of the CAC, the NDRC, the MIIT, and the SASAC. Preparations have now entered the final stretch, and as the host, we will present a splendid digital event by further improving our services.

The theme of the fourth session is "New Potential for Data and New Journey of Digital China." We will highlight its features and host it both offline and online over an optimized Cloud Summit platform, to provide guests and friends unable to attend with an immersive experience of participation. The Digital China Innovation Contest will add up to eight competition categories, in which many leading digital companies and well-known universities and colleges will take part. We have invited three sister provinces — Sichuan, Anhui, and Guangxi — to be its guests of honor to showcase their digital construction achievements and industrial development. We will enrich and improve the session from the following four aspects based on the sound experience of the previous three sessions.

First, we will make it an event for displaying new digital applications. We will build a cloud exhibition hall with dedication, incorporate more interactive experiences with virtual products, and demonstrate 5G+8K ultra-high-definition videos and technologies like holographic projection, to endow the cloud platform with new features. We will adopt technologies such as contactless face recognition and one-code access, to offer smart services throughout the event. We will also open online and offline exhibition halls for daily displays of the event's highlights and outcomes, as well as the latest and most cutting-edge digital technologies, to present a summit that never ends.

Second, we will make it an event for experiencing new ideas with digital activities. This year's session will comprise a main forum and 20 sub-forums. The number of sub-forums will hit a new high. For the first time, China's ministries and state-owned enterprises (SOEs) will host multiple sub-forums on digital villages, the Digital Silk Road, new urban infrastructure, the digital transformation of SOEs, cybersecurity and information security, and more. Leading digital companies will hold over 20 activities such as "Outlook for Fuzhou" on the city's Sanfang Qixiang historical and cultural street to highlight the interactions between traditional culture and modern digital technology. There will also be a "Minjiang Dialogue," an academician and expert trip, and a digital village seminar, at which an innovative development path for a Digital China will be discussed.

Third, we will make it an event for seizing new opportunities empowered by digital development. The summit will contribute to building a Digital China with its spillover effect. The national-level pilot zone for innovation and development of the digital economy, the innovation center launched by BRICS countries in Xiamen, and the Maritime Silk Road Satellite Data Service Center have brought along new opportunities for high-quality development. This session will continue pooling experts in the digital field, showcasing digital application scenarios, releasing digital development policies, matchmaking digital industry projects, and actively serve the new development paradigm as a platform for cooperation in the digital economy industry across the country.

Fourth, we will make it an event for experiencing the new life amid digital transformation. More government organizations, companies, and public institutions will bring innovations in digital government, digital society, digital culture, smart cities, and digital villages, especially focusing on the scenarios of developing and using big data resources, and displaying brand new practices of smart life in the digital age. I believe you are bound to have a more dazzling and cooler new experience.

Fujian is now working on a plan specially for Digital Fujian during the 14th Five-Year Plan period at a high starting point with the benefits brought by digital transformation. We are accelerating the construction of a national-level pilot zone for the innovation and development of the digital economy and plan to be the No. 1 province for digital applications. We are deepening cooperation along the Digital Silk Road, and promoting all-round high-quality development on a new journey of building Digital Fujian.

We sincerely invite friends, both old and new, to visit Fujian and Fuzhou and attend the grand event to pursue a better future together.

Thank you.

Chen Wenjun:

The floor is now open for questions. Please name the news outlet you work for before asking questions. 

CCTV:

We noticed that the Outline of the 14th Five-Year Plan and the Long-Range Objectives Through the Year 2035 proposed to accelerate digital development and build a Digital China. Can you brief us on building a Digital China during the 13th Five-Year Plan period and the new measures to be taken during the 14th Five-Year Plan period? Thank you.

Yang Xiaowei:

Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has laid great emphasis on building China into a cyber power and a digital country. After the release of the Outline for National IT Application Development and the National IT Application Plan during the 13th Five-Year Plan period, China's Cyberspace Administration and related departments have implemented the strategic plan and continuously conducted monitoring and assessment of the work on building a Digital China. During past years, we have released the Report on the Development Process of Building a Digital China in succession and achieved great progress in building a Digital China. The achievements are mainly as follows:

First, we are now global leaders in information infrastructure construction. Our country has built the world's largest fiber-optic network and 4G network. The netizen population increased from 688 million by the end of 2015 to 989 million by the end of 2020. During the same period, the internet service popularization rate increased from 50.3% to 70.4%. The commercialization of 5G has picked up speed, with nearly 720,000 5G base stations completed and more than 200 million 5G terminals connected. The large-scale deployment of IPV6 in China has also been very effective.

Second, the innovation capacity of information technology continues to improve. Significant progress has been made in the research and development of some of our basic and general technologies, and the development of integrated circuit manufacturing, equipment and materials has been accelerated. 5G artificial intelligence (AI), as well as domestic high-performance computing and quantum computing, have made significant scientific research achievements. China's Innovation Index jumped from 29th place in 2015 to 14th place at the end of last year.

Third, the vitality of the development of the digital economy continues to increase. The digital economy continues to grow rapidly, and the quality and effectiveness of our digital economy development has been significantly enhanced. New formats and models keep emerging, and by the end of last year, the value added of the core capacity of the digital economy accounted for 7.8% of the GDP.

Fourth, the efficiency of e-government services has significantly improved. E-government has strongly supported the modernization of China's governance system and governance capacity, and the level of public services has continued to improve. As you know, in the last year, China's e-government development index improved its global ranking by 20 places compared to 2018. China's online service index has climbed to the 9th place globally, reaching a very high level.

Fifth, we accelerated IT popularization to bring convenience and benefits to the people. By the end of last year, the internet access rate in primary and middle schools across China had reached 100% and the long-distance medical collaboration network had covered 24,000 medical institutions. All the targets of internet access in relation to poverty alleviation were completed by the end of last year. Steady progress was made in the building of "digital villages", injecting new digitalized and IT application impetus to rural vitalization.  

Sixth, international cooperation in regards to cyberspace was deepened. China proposed and launched the G20 Digital Economy Development and Cooperation Initiative, the Initiative on Belt and Road Digital Economy Cooperation, the Global Data Security Initiative and so on, thus contributing Chinese strength and plans to global digital economic development and cyberspace governance.

Yang Xiaowei:

The reporter just mentioned the 14th Five-Year Plan. In the next stage we will implement the decisions and deployments of the CPC Central Committee and carry out the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035. Right now, we are compiling the National IT Application Plan during the 14th Five-Year Plan period and we plan to make efforts in nine aspects as follows:

First, we will accelerate the optimization and upgrading of information infrastructure and the deployment of the 5G network on a large scale; make layouts for 6G network technology reserves in advance; and promote the deployment of IPV6 application on a large scale.

Second, we will invigorate the vitality of digital elements; and accelerate the formulation of fundamental systems, norms and rules of digital resource circulation, cross-border transmission and security protection.

Third, we will set up innovation systems to unleash digital productivity; accelerate the innovative application of digital technologies; and improve systems and mechanisms regarding scientific and technological innovation.

Fourth, we will accelerate digital industrialization and industrialized digitalization. We will promote the integration of digital technologies in the real economy, thus forging new competitiveness in the digital economy across China.

Fifth, we will accelerate the pace of building a digital society, promote the construction of new-type smart cities and "digital villages" and build a digital lifestyle that can be enjoyed by all.

Sixth, we will increase the digitalization level of the government, improve the national administrative system, give full play to the function of the government and significantly boost administrative efficiency and public trust.

Seventh, we will develop convenient digitalized services to benefit all people, and enhance multi-layer social security systems to strengthen people's sense of gain continuously.

Eighth, we will advance mutually beneficial and win-win international cooperation in the digital field and jointly build a community with a shared future in cyberspace. 

Ninth, we will establish inclusive and prudent digitalized development governance systems, and create a favorable digital development environment. During the 14th Five-Year Plan period, we will make efforts in the above-mentioned nine aspects. Thank you for your question.

Bauhinia Magazine:

The Digital China Summit has been held in Fuzhou for three years. How effective has Fuzhou been in developing the digital economy in recent years, and what are the plans and considerations for further promoting Fuzhou's digital economy in the future? Thank you.

You Mengjun:

Thank you for your question and your concern about Fuzhou. As early as 2000, General Secretary Xi Jinping, then-governor of Fujian province, put forward the strategic concept of building a Digital Fujian. During the past few years, following the instructions of General Secretary Xi and the deployments of the CPC Fujian Provincial Committee and the Fujian provincial government, Fuzhou has concentrated on developing its digital economy and has grasped the Digital China Summit as an opportunity. Thanks to all these efforts, the volume of the city's digital economy increased to 460 billion yuan in 2020 from 280 billion yuan in 2018 with the average annual growth rate surpassing 25%. The proportion of the digital economy in local GDP has been raised to over 45% from 36%. At present, there are 37 listed enterprises in the digital economy located in Fuzhou. We have focused on the following five areas:

First, we have carried out two special programs. One is a three-year initiative on building "Digital Fuzhou," which consists of 137 key projects in the areas of e-government service and data resources. The other one is a three-year action plan for new infrastructure, which includes 175 key projects of information infrastructure with the total investment valuing more than 230 billion yuan.

Second, we have established five industrial bases, focusing on big data, the Internet of Things, software, displays and photoelectricity. Many excellent enterprises in the digital economy such as BOE, Inspur, NetDragon, Bitmain and Guomai Tech have settled in the city, earning Fuzhou the title of "China's famous software city."

Third, we have accelerated the empowerment of digital technology. In traditional industry, more than 2000 companies have taken part in cloud-based platforms. We have fostered eight province-level industrial internet demonstration platforms including Morewis Cloud and Histron Cloud, 24 application benchmarking companies, and 188 provincial-level "Internet Plus" manufacturing projects. In the emerging industrial field, we have 360 AI-related companies and 523 blockchain-related companies. The Kunpeng Industrial Ecosystem is being applied first in Fuzhou.

Fourth, we have set up public service platforms for the digital economy. Basic supporting platforms including China-Fuzhou Internet of Things Open Lab, National Internet backbone access points and two major projects for the Digital Fujian Cloud Computing Center have been established. Sci-tech innovation platforms focusing on large-scale supercomputers, AI and optoelectronic information science and technology have been built. Industry-university-research cooperation platforms including the Tsinghua-Fuzhou Institute of Data Technology and the Southeast Research Institute of Express Big Data of the State Post Bureau have been introduced in Fuzhou.

The fifth thing is to build Fuzhou into a number one digital application city. In the aspect of e-government applications, we provide immediate and one-stop services based on the "Internet Plus Government Services" model to ensure that people can get things done through apps or through single visits to any related department within the city. At present, Fuzhou ranks 28th among Chinese cities for its business convenience, and stands at 4th place in the ranking of digital government development among provincial capital cities in China. In terms of urban management, we have built an intelligent drainage-water system and coordination center around the "city brain" and launched the country's first city-level public service platform for facial recognition. Fuzhou has been awarded the "China's Leading Smart City Award" for five consecutive years. In the aspect of services related to people's livelihoods, we have created "e-Fuzhou" public service model which provides transportation, educational, medical, community and other services. We are gradually enabling our citizens to experience new services and new lifestyles with the application of information technology.

After years of accumulation, Fuzhou's digital economy has already gained a solid foundation. Next, we will continue to implement General Secretary Xi Jinping's strategic thought on building a digital China in earnest with special gratitude and responsibility. In the future, "Digital Fuzhou" will remain our main direction of economic development. Becoming the number one city for digital applications will continue to be our working strategy, and building Fuzhou into a digital demonstration city in China will always be our goal. We will enhance our efforts in the following three areas. First, we will concentrate on cloud computing, big data, Internet of Things, AI and blockchain, and promote digital industrialization and industry digitalization in traditional industries such as textiles, chemical fibers, machinery manufacturing, metallurgical and building materials. Second, we will accelerate construction of information infrastructure, including supercomputing, storage and digital centers. Third, we will provide more and better applications for digital education, digital culture and tourism, and digital health care.

In short, we will continue to expand the platform effect of the Digital China Summit, make all-out efforts to develop the digital economy, and promote all-round and high-quality development in Fuzhou. Thank you.

Guangming Daily:

Many aspects of Fujian's digital economy such as 5G, blockchain, AI, and big data have been well developed. What are the specialties of Fujian's digital economy? What industries will you focus on supporting next? 

Guo Ningning:

Thank you for your question. In 2019, Fujian became one of the six national-level pilot zones for innovation and development of the digital economy. We have carefully studied and made action plans for the pilot zone to speed up the development of digital infrastructure, digital industries, digital trade, and digital consumption, striving to contribute Fujian's experience and plans to China's digital economic development. The advantages of Fujian to develop its digital economy can be summarized into the following six aspects.

First, through the construction of platforms. Fujian is located in a core maritime silk road area and boasts several national-level platforms such as the Fujian Pilot Free Trade Zone, the Xiamen BRICS innovation base, the digital service export base, and the comprehensive cross-border e-commerce pilot zone. The various advantages of multiple platforms have greatly supported the innovative development of the digital economy. 

Second, through the development of industries. The output values of Fujian's key industries such as the Internet of Things and AI have all exceeded 100 billion yuan. Key digital parks such as the Digital Fujian Industrial Park, the Fuzhou Software Park, and the Xiamen Software Park have become large industry clusters and hubs for the innovative development of digital industries. 

Third, we have created channels. Fujian has opened several international logistics routes, such as Silk Road Sea Transport and Silk Road Air Transport as well as the China-Europe Railway Express, becoming an important link connecting the land and maritime silk roads. Domestically, we have built a "two verticals and three horizontals" comprehensive transportation system and several "information highways" such as the Cross-Straits Optical Fiber Cable No. 1 and the national-level internet backbone direct connection point.

Fourth, we have built infrastructure. Fujian has planned new infrastructure early on and its new infrastructure index ranks within the top five nationally. The Digital Fujian Cloud Computing Center and Super Computing Center have been completed. 5G base stations cover all areas above county level, including major villages and towns. All cities have met standards for the high-level optical network cities.

Fifth, we have made supportive policies. To support digital economic development, Fujian has gradually rolled out a slew of policies concerning the industrial internet, satellite application, digital silk roads, intelligent manufacturing, and new infrastructure to improve the environment for advancing the digital economy. 

Sixth, we have fostered further potential. Fujian's digital economy has constantly accelerated the pace of development, transformation and upgrading. The provincial digital economy in 2020 reached 2 trillion yuan, an increase of 15%. It accounted for 45% of the provincial GDP. It is estimated that by the end of the 14th Five-Year Plan period (2025), the added value of the digital economy will exceed 4 trillion yuan, accounting for nearly 60% of the provincial GDP, a significant increase. It is therefore a crucial engine for the high-quality development of Fujian's economy. 

In the future, we will further advance the development of the digital economy and focus on implementing the following six measures. First, we will achieve breakthroughs in a batch of core technologies such as cutting-edge chips, core electronic components, and basic materials. We plan to build more than 100 high-level digital innovation platforms, with an emphasis on digital transformation of key industries. Second, a batch of digital innovation application scenarios will be generated. We will speed up the applications of AI, blockchain and 5G technologies, promote commercialized demonstrations and applications and build ourselves into the "No. 1 province in digital applications." Third, we will promote a batch of featured digital industries. Digital industry clusters regarding the building of "Smart Ocean," satellite applications, and ultra-high-definition videos will see accelerated development in a bid to advance digital industrialization and the high-quality development of digital industries. Fourth, we will foster a batch of pioneering digital companies. We have implemented a dedicated campaign for the cultivation of digital innovative companies and plan to foster more than 3,000 pioneering companies and digital innovative companies by 2022. Fifth, we will establish a batch of demonstration areas as pacesetters for digital development, launch actions to improve digital economic zones, and establish core areas for opening-up and cooperation in building "digital silk road." Sixth, we will explore a batch of digital innovative mechanisms to ease access to the digital economic market and advance legislative procedures regarding Fujian province's big data regulations. We plan to establish big data companies and effective allocation mechanism for the production factor of data to improve the digital economic environment and inject new momentum into the all-round and high-quality development of Fujian. Thank you. 

Beijing Daily:

The 14th Five-Year Plan has dedicated a whole chapter to digital development. What will the relevant departments do to advance digital economic development and the building of "Digital China" ? Thank you. 

Yang Yuyan: 

Thank you for your question. As you said, the 14th Five-Year Plan has dedicated a whole chapter to speeding up digitalization and building a digital China, and has set specific targets and requirements that show that the CPC Central Committee and the State Council have attached great importance to building a digital China. In recent years, under the strong leadership of the CPC Central Committee and the State Council, the MIIT has markedly boosted digital economic development. During the 13th Five-Year Plan period (2016-2020), China's digital economy registered a growth rate of 16.6%, laying a solid foundation to build a digital China. 

First, industrial foundation has been improved. As Mr. Yang mentioned, we have built the largest optical cable network and 4G network in the world. The number of terminal devices connected to the 5G network has exceeded 200 million. Fast development has been witnessed in areas such as the software and IT service sector, the electronic information manufacturing sector, and the communication service sector. Taking software as an example, the sector raked in an accumulated revenue of 8.16 trillion yuan in 2020, an increase of 13.3% year on year. 

Second, the pace of digital transformation continues to accelerate. In terms of manufacturing, we have vigorously promoted the construction of the industrial internet. Currently, there are more than 80 industrial internet platforms with various influences in the country, and the number of industrial apps exceeds 350,000, which strongly supports the industry's improvement in quality, cost reduction, and efficiency. In terms of information consumption, we are actively cultivating and promoting new data-driven models and business forms. Especially during the period of COVID-19 pandemic prevention and control, online education, telecommuting, and online shopping, among others, have all played a very important role.

Third, we continue to optimize China's environment for development. We have pushed to issue a series of documents, such as the "Several Policies to Promote High-quality Development of Integrated Circuit Industry and Software Industry in the New Era," as well as formulated a batch of national standards, such as the data management capability maturity assessment model. Additionally, we have guided local governments to promote national comprehensive experimental zones for big data, and promote the construction of landmark software industry cities, accelerating the agglomeration and development of the digital industry.

In the next step, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the MIIT will follow the trends of digitalization, networking, and intelligent development, and accelerate the construction of a digital China. Focus will be put on the following three aspects.

The first is to promote the digital industry to become bigger and stronger. We will focus on the seven key digital industries and ten digital application scenarios listed in the outline for the 14th Five-Year Plan. We will use applications as the driving force to promote the development of emerging strategic industries, such as big data, AI, and blockchain. We will also focus on cultivating an ecosystem for open-source software, and create an internationally competitive digital industry cluster.

The second is to promote the deepening and solid implementation of digital transformation. We will more deeply embed next-generation IT into the manufacturing sector, and use digitalization to drive changes in production methods. We will expand and upgrade information consumption, speed up the construction of information accessibility, and drive lifestyle changes with digitization to benefit people's life and work.

The third measure is to gradually improve the digital ecosystem. We will continue to improve the data management capabilities of enterprises and public institutions, and consolidate the foundations for data processing. We will cultivate big data trading platforms, explore various forms of data transaction models, and promote data circulation. We will effectively collect, manage, and use data, and activate the value of data elements.

At the upcoming Digital China Summit, the MIIT will host five sub-forums across topics such as big data, digital technology innovation, open-source software ecosystem, the industrial internet, and digital society. Here, I also sincerely invite everyone to actively participate in these sub-forums, have in-depth exchanges, and jointly contribute to the construction of digital China. Thank you.

New York Times:

Fuzhou was one of the first cities in China to develop close ties with the United States. Back in the 1800s, many American families, including my mother's family, moved to Fuzhou to do volunteer work in education and medicine as American missionaries. How has Fuzhou's history in education and in having international ties made a difference today in its economic development and in its digital development? Thank you. 

You Mengjun:

Thank you very much for your question. Fuzhou has a relatively long history of foreign exchanges. Since the middle of the 19th century, it has established contacts with many countries, including the United States. Especially after the reform and opening up, Fuzhou has continued to strengthen exchanges with cities from all over the world in the fields of economy, trade, and culture, realizing close cooperation, mutual benefit, and a win-win situation among all parties. With China opening its door wider and wider, Fuzhou very much hopes to continue to strengthen exchanges with countries and regions around the world, and to serve as a bridge to help form friendships between various peoples.

Regarding the impact of the Digital China Summit on the economy and society of Fuzhou, I think it will be extensive, profound, and everlasting. The Digital China Summit allows us to firmly position digitalization as a leading force in Fuzhou's industrial development, make us more determined and confident in the development of the digital economy, and make our industrial transformation and upgrading faster and faster so that our citizens can also enjoy increasingly convenient public services. We believe that with more summits to be held in the future, more new opportunities and changes will be brought to Fuzhou, and will help Fuzhou achieve faster and better development. Thank you again for your question.

The Poster News APP:

From the "Two Sessions" to the March 15 Consumer Day Gala, issues of data privacy and security have been consistently raised. With the advent of the digital economy era, data has become a new type of production factor and social wealth, and will be continuously shared, analyzed, and utilized. But it also means that personal privacy has become a primary concern in digital societies. In the future, what considerations will be taken to improve data security and privacy protection in the big data environment? Thank you.

Yang Xiaowei:

The CPC and the central government attach great importance to data security, personal information protection, and digital privacy. Over the past few years, we have continued to strengthen data security and personal privacy protections amid the rapid development of big data. We have implemented several important measures:

First, we continued to implement the Cybersecurity Law nationwide. We further strengthened coordination in policies, laws, and supervisions. We are stepping up efforts to formulate a data security law and a personal information protection law to ensure data security and individual privacy protection from a lawful perspective.

Second, we continued to enhance protection capabilities for the nation's critical information infrastructure, strengthened data security early warning and traceability systems, and comprehensively improved the data security protection of key information in key national sectors.

Third, we are stepping up efforts to formulate relevant regulations and criteria to establish systems for the confirmation, opening, circulation, and trading of data resources to further improve data property rights protection in terms of these operating mechanisms. This will provide institutional support for data security and the protection of individual privacy and personal information.

Fourth, we intensified efforts to enforce data security and personal information protection. In recent years, as you have seen and reported, we worked with relevant departments to step up efforts to protect technical patents, data copyright, individual data privacy, and continued rectification.

Fifth, we enhanced the publicity of data security. The Cyberspace Security Publicity Week, approved by the CPC Central Committee to take place every September, have given rise to an understanding throughout society about data security, protection of personal information, and individual privacy, and has safeguarded the vital interests of the people. Thank you.

Economic Daily:

SOEs are an important pillar of the national economy, and their digital transformation has attracted much attention. Could you brief us on what important measures will be taken next? Thank you.

Gou Ping:

Thank you for your question and concern about the digital transformation of SOEs. The CPC Central Committee and the State Council attach great importance to digital development. General Secretary Xi Jinping has repeatedly made important instructions on how to build China's strength in cyberspace, develop a digital China, and boost the integration of the digital economy and the real economy. At the Fifth Plenary Session of the 19th CPC Central Committee and the recently concluded Two Sessions, China made systematic arrangements for accelerating digital development. The SASAC will fully implement the policy decisions and plans of the CPC Central Committee and the State Council, and advance the digital transformation of SOEs.

First, we will strengthen top-level design. The Notice on Accelerating the Digital Transformation of State-owned Enterprises was issued to clarify the significance, main tasks, and safeguards of the digital transformation of SOEs.

Second, we will step up efforts to make this transformation. We have made digital transformation a key task in the reform and development of central SOEs, invited heads of SOEs to give lectures on digital transformation, and held promotional activities. Additionally, we have set up a collaborative innovation platform for central SOEs involved in BeiDou, blockchain, digital, and e-commerce development.

Third, we will set up demonstrative models to play a leading role. We have selected and published 100 typical cases in eight categories from SOEs, including product and service innovation and intelligent production and operation, to promote mutual learning.

SOEs have responded positively. Overall, the digital transformation of SOEs has made positive progress, which can be summed up in the following three aspects. First, we have accelerated the construction of a new digital infrastructure, in which SOEs can give full play to their role as the main force in new infrastructure construction. We sped up the construction of new digital infrastructure such as 5G, big data centers, and the industrial internet. The application of the BeiDou system in the industry has been enriched. More than 80 central SOEs have built group-level data centers and established more than 60 industrial internet platforms represented by the CASICloud and CEC Industrial Internet. Three central telecom SOEs have built more than 700,000 5G base stations, and COMAC has built China's first plant with full 5G coverage.

Second, we will accelerate the digital transformation of industries. SOEs have deepened the integration of digital technology and production, making major headway in digital product innovation, intelligent production, smart user services, and industrial ecology. Two thirds of the R&D institutes of the central SOEs have achieved work in 3D digital modeling and simulation, and more than half have built collaborative digital ecological platforms for the industrial chain. China State Shipbuilding Group has designed and built the world's first smart ship certified by classification societies (China Classification Society and Lloyd's Register). China Baowu has built an unmanned factory to achieve quasi-unmanned crane operations. Meanwhile, the State Grid has built a new energy cloud platform to promote the coordinated development of more than 3,000 upstream and downstream enterprises.

Third, we will boost the industrial application of digital technologies. SOEs have focused on core electronic components, high-end chips, industrial software, among other key areas to strengthen target research, and made breakthroughs in CPU, FPGA, operating systems, and EDA. SOEs have fostered a digital industry with a focus on cloud computing, big data, the Internet of Things, AI, and blockchain. Nearly 60 central SOEs have set up digital industry companies and more than 70 central SOEs have registered an annual transaction volume of more than six trillion yuan in e-commerce business. A group of influential enterprises have been developed, including State Grid Information & Telecommunication Group, Shanghai Baosight Software, and Richfit.

Next, we will enhance communication and cooperation with relevant state departments and local governments. We will make joint efforts to organize the implementation of special action plans for SOE digital transformation, coordinate the progress of digital transformation of industries and the industrial application of digital technologies, and break through core technologies to foster digital application scenarios, build models for industrial transformation, and make new progress in the digital transformation of SOEs. Thank you.

Cover News:

The SASAC recently issued a circular on speeding up efforts to promote the digital transformation of SOEs. The circular notes that China will intensify efforts to solve major R&D difficulties in the areas of core electronic components, high-end chips, and key software production. What are the specific plans? How will SOEs give full play to their advantages in this regard? Thank you.

Gou Ping:

Thank you for your questions. As you said and as I mentioned earlier, China is indeed weak in fields such as core electronic components, high-end chips, and key software production. The central SOEs have fully put into practice General Secretary Xi Jinping's important instructions on speeding up efforts to achieve breakthroughs in core technologies in key areas while acting in accordance with the decision and deployments made by the CPC Central Committee and the State Council. The central SOEs have focused on the key weaknesses, given full play to their advantages, and pooled great strength into further development. They have spared no efforts to expedite R&D activities and made positive progress. The SASAC has tried its best to help the central SOEs speed up efforts to make breakthroughs. In terms of strengthening guidance for assessment, increasing support for income distribution, establishing incentive mechanisms, and increasing capital support, we have strengthened policy support and provided guidance for enterprises to increase investment on R&D fronts. We have brought together factors for innovation and stimulated the drive for innovation to accelerate the pace of R&D breakthroughs. Meanwhile, we are also supporting professional mergers and acquisitions and corporate reorganization in the fields of core technologies with key links to be carried out in line with market principles. This will hopefully strengthen enterprises in the industrial and supply chain and improve the support capacity of our supply chain and the resilience of our industrial system. We also give full play to our institutional strength, which is to mobilize resources to accomplish major initiatives as well as the overall advantages of the central SOEs. We support central SOEs to take the lead and establish systemic, task-oriented innovation consortiums as well as industrial and technological innovation alliances in a bid to undertake major national sci-tech projects; promote further integration between enterprises, universities, research institutions, and consumers; and foster innovation along the industrial chain and among all sizes of enterprises. In particular, we encourage the central SOEs to harness their platform and application strengths to help all innovators in their R&D efforts and market applications and to promote the application of new technologies and products. The central SOEs already have some experience in this area and have made progress in collaborative innovation.

Next, the SASAC will focus on high-quality development and work to establish a new development paradigm. We will make sci-tech innovation a top priority and pool the resource and strength advantages of central SOEs to establish key areas for sci-tech breakthroughs, areas of development for original technologies, major hubs for sci-tech talents, and "special zones" for sci-tech innovation. We will make central SOEs a strategic strong point for national sci-tech industry and let them better play their part in speeding up efforts to make China a country of innovators in an effort to achieve self-reliance in science and technology. 

Beijing Youth Daily:

As China accelerates its efforts to build a digital society, the issue of the digital divide has become increasingly severe for the elderly. The MIIT said that a special campaign will be launched to help the elderly better adapt to online applications. What is the current status? Thank you.

Yang Yuyan:

Thank you for your question. This January, the MIIT launched a campaign to make online applications more elderly-friendly and barrier-free. The deployment work was recently finished and the campaign has been put into practice.

Next, we will follow the schedule and arrangement and focus on the actual needs of the elderly people; organize relevant parties to speed up the elderly-friendly and barrier-free adaptation work for websites and mobile applications; and establish an evaluation system to test the efficiency. It is estimated that by the end of this year, the first batch of qualified, barrier-free websites and mobile applications will be selected and released to the public. Thank you.

Guangming Online:

The outline of the 14th Five-Year Plan mentions that China will speed up efforts to build its digital economy. What are the policy considerations behind developing the digital economy? Thank you.

Sun Wei:

Thank you for your question. I also want to thank our friends from the media for your long-term interest in and support for the development of the digital economy. General Secretary Xi Jinping has attached great importance to the development of the digital economy, proposing to build a digital economy with data as a key element, and promoting and integrating the digital and real economies.

In recent years, the CPC Central Committee and the State Council have carried out a series of strategic measures such as building China's cyberspace strength, developing mechanisms for big data, and advancing Internet Plus initiatives, which have laid a solid foundation for the development of the digital economy. The just-concluded fourth session of the 13th National People's Congress has reviewed and adopted the outline of the 14th Five-Year Plan. It proposes accelerating digital development to build a digital China, making deployments for the development of the digital economy in the new era. The NDRC will fully implement the arrangements made by the CPC Central Committee and the State Council and work with relevant parties to put into practice the outline of the 14th Five-Year Plan and speed up the development of the digital economy. Our efforts in this regard will be made in the following six aspects.

First, the top-level design of the digital economy will be further strengthened. We will formulate special 14th five-year plans for the digital economy, strengthen the innovation and application of key digital technologies, accelerate digital industrialization and industrial digitalization, improve the digital governance system, and upgrade digital services. We will drive overall reforms in the ways of work, life, and governance through digital transformation and promote high-quality development.

Second, the construction of new types of infrastructure will be actively promoted to consolidate the development foundation of the digital economy. We will devise and introduce the 14th five-year plans for new infrastructure construction, enhance overall planning and coordination, refine the policy environment, and increase support. We will speed up the establishment of a collaborative innovation system for national integrated big data centers and promote high-quality and green development of data centers and 5G.

Third, the cultivation of the data factor market will be accelerated. We will give play to the key role of factors of data production, activate the potential for data production, and further improve the data ecology. We will work out and release guiding documents to develop the data factor market and build and improve the systems, standards, and norms in this field, including in areas of property rights, transaction and circulation, cross-border transmission, and security protection of data resources.

Fourth, the deep integration of digital technology and the real economy will be further advanced. We will foster new strengths in the digital economy, build new drivers for its development, and generate new industries as well as new forms and models of business. We will continue to implement the "Digital Transformation Partnership Initiative" to facilitate the digital and intelligent upgrading of conventional enterprises.

Fifth, guidance for regional pilot and demonstration programs will be intensified. We will implement major regional strategies and steadily advance the development of pilot zones for the national digital economy's innovation and development. We will speed up efforts to guide pilot zones to conduct preliminary trials in light of local conditions and reduce systemic and institutional barriers for development to give full play to their driving and demonstrating roles.

Sixth, a standardized and orderly policy environment will be fostered. We will build a policy and regulatory system that is compatible with the development of the digital economy, attach equal importance to both development and regulation, support the innovative development of platform companies, and enhance their international competitiveness. We will tighten supervision over online platform economy in accordance with laws and regulations, and strengthen the building of dynamic and innovative institutions in order to vigorously support the development of the digital economy.

Thank you again for your question. The NDRC will hold a sub-forum on the digital economy at this Summit (the 4th Digital China Summit). We welcome your input and participation.

Red Star News:

This year's summit includes eight competitions, adding, for example, events related to big data and robots. What were the considerations for doing so? How do we encourage teenagers to participate in these competitions?

You Mengjun:

This a very good question. General Secretary Xi Jinping has repeatedly stressed that to seek innovation is to seek the future. As an important part of the summit, the Innovation Contest has now been a success across two sessions, attracting the participation of a large number of outstanding teams and teenagers from home and abroad. The last session of the contest witnessed the involvement of nearly 10,000 teams and more than 20,000 contestants. The contest is becoming more and more professional and its reputation is growing across the industry.

This year's event will see eight competitions held simultaneously, including digital Party building, digital government, big data, smart healthcare, Kunpeng computing, cybersecurity, integrated circuits, and youth AI robots. Organizing competitions in these fields is mainly to dovetail areas of interest in the development of digital technology and various points of industry focus. For example, this year marks the 100th anniversary of the founding of the Communist Party of China, so we added a new competition event titled digital Party building.

You mentioned another two new competition events just now — big data and robots — for which we had the following considerations:

General Secretary Xi Jinping pointed out that data is also a factor of production and big data is an important productive force. By holding the big data competition, we aim to focus on the theme of this year's summit, pooling intellectual resources of enterprises, colleges, and universities, and scientific research institutions to accelerate the technological innovation and industrial application of various data. We also seek to explore new models and scenarios for data sharing, opening-up, development, and utilization and develop a group of big data application projects to facilitate industrial transformation, social governance, and public services in a targeted manner.

General Secretary Xi Jinping pointed out that the cultivation of scientific and technological personnel should begin with children. The Digital China Summit also attaches great importance to the fostering of innovation among teenagers. During the third session of the summit last year, we held a contest for primary and middle school students. After an extensive selection process, nearly 1,000 students took part in the competition, which highlighted the innovative potential of many young people. This year, we changed the contest for primary and middle school students into a youth-built AI robot competition, whose aim is to "popularize AI education and cultivate scientific and technological personnel for the future." By doing so, we want to highlight the important position of AI in the application of digital technology and guide teenagers to study AI knowledge systematically through interesting and challenging competitions with the goal of cultivating scientific professionals for the future.

In order to encourage youngsters to participate in the AI robot competition, we worked with the Fujian Association of Science and Technology and other institutions to carry out promotional activities at primary and middle schools across the province. It is hoped that the competition will attract a new generation of students to study and take interest in information technology. As far as we know, students are so far very interested in the competition and schools are organizing registration. The competition is expected to stimulate primary and middle school students' interest in digital technology innovation and help cultivate young innovative talents who will make contributions to the development of Digital China. Thank you for the questions.

Chen Wenjun:

The last question.

Yicai:

Digital rural development is an important strategic direction for rural vitalization and an essential part of building a Digital China. What progress has been made in promoting digital rural development? What new measures will be taken? Thank you.

Yang Xiaowei:

In accordance with the decisions and plans of the CPC Central Committee and the State Council, the CAC has deeply implemented the Outline of the Digital Rural Development Strategy. We have enhanced policy coordination and interaction at different levels with relevant departments, including the Ministry of Agriculture and Rural Affairs, the NDRC, and the MIIT. Together, we have identified and focused on the key tasks of digital rural development in 2020 with coordinated actions. In the past year, with COVID-19 control as a "new normal," digital rural development played a big role in various aspects: in the support of COVID-19 control and work resumption in rural areas; advancing poverty alleviation; promoting agricultural and rural modernization; improving information services for agriculture, rural areas, and rural people; and bridging the digital divide between urban and rural areas.

First, all targets for digital rural development in 2020 were achieved on schedule. Thanks to the efforts by the MIIT, the SASAC, China's three major telecom operators (China Mobile, China Unicom, and China Telecom), and China Tower, information infrastructure in rural areas was further improved. More than 98% of administrative villages had access to fiber-optic cables and 4G services. Some 309 million rural people accessed the internet, and the internet penetration rate in rural areas was 55.9% by the end of last year. Total online retail sales across China's 832 national-level poverty-stricken counties jumped 26% year on year to more than 301.4 billion yuan ($46.3 billion).

Second, internet infrastructure in rural areas was further improved. The MIIT and the Ministry of Finance (MOF) organized the provision of universal telecommunications services in six batches. We established 13,700 4G base stations in rural areas. The National Radio and Television Administration (NRTA) stepped up efforts to increase the coverage of radio and TV broadcasts in rural areas. Approximately 146 million rural households had access to satellite TV.

Third, the digital economy expanded the space for rural development. The Ministry of Commerce, the MOF, and the new national administration for rural vitalization continued to introduce e-commerce to poverty-stricken villages and has supported e-commerce development in a total of 1,338 counties. Live streaming has become a new way to facilitate the outflow of agricultural products from the countryside.

Fourth, we utilized information technology to drive the digital transformation of agricultural production. The Ministry of Science and Technology organized the implementation of major projects, while the Ministry of Agriculture and Rural Affairs promoted the integrated application of information technology and agricultural machinery services in various fields such as plantation and animal husbandry.

Fifth, with the establishment of a nationwide online platform, government services are being extended from national, provincial, municipal, and county levels to townships. 

Sixth, continuous measures were made to develop cyber culture in rural areas. The Publicity Department of the CPC Central Committee, the CAC, the NRTA, and other departments worked together to promote the building of integrated media centers at the county level. So far, more than 2,400 county-level integrated media centers have been launched and are developing into major platforms for public communication.

Seventh, active steps were taken to explore new models for digital rural development. Last year, the CAC and seven other ministerial-level departments launched a trial project for digital rural development, which now covers 117 counties and cities. We are tracking its development in order to accumulate experience which can be applied to other places across the country.

We are cooperating with other relevant departments to identify key tasks for digital rural development in 2021 according to the Outline of the Digital Rural Development Strategy. We aim to boost the development of rural industries, further optimize the layout of the industries, and enhance rural people's digital skills and literacy so as to consolidate gains in poverty alleviation, especially poverty alleviation through internet-based services, and upgrade services by promoting digital rural development.

Chen Wenjun:

Thank you to all the speakers and journalists. Today's press conference is hereby concluded. 

Translated and edited by Mi Xingang, Liu Qiang, Liu Jianing, Huang Shan, Zhang Jiaqi, Zhou Jing, Lin Liyao, Zhang Junmian, Zhang Rui, Chen Xia, Duan Yaying, Zhu Bochen, Li Huiru, Xu Xiaoxuan, Fan Junmei, Wang Qian, Zhang Liying, Wang Wei, Wang Yiming, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Li Bin, deputy director of the National Health Commission (NHC)

Tian Yulong, member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer

Chang Jile, director of the Bureau of Disease Prevention and Control of the NHC

Yuan Lin, director general of the Department of Drug Regulation of the National Medical Products Administration (NMPA)

Wang Junzhi, deputy head of an expert task force on vaccine development and academician of the Chinese Academy of Engineering

Wang Huaqing, chief expert of the National Immunization Program of the Chinese Center for Disease Control and Prevention

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

March 15, 2021

Shou Xiaoli:

Good afternoon, ladies and gentlemen. Welcome to the State Council's interagency task force press conference. Currently, China has been promoting COVID-19 vaccination in an orderly manner, and people are very concerned about the progress. To help people better understand the situation, today we have invited Li Bin, deputy director of the National Health Commission (NHC) to brief you on promoting COVID-19 vaccination and answer questions of interest. We also have with us Tian Yulong, member of the Leading Party Members Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer; Chang Jile, director of the Bureau of Disease Prevention and Control of the NHC; Yuan Lin, director general of the Department of Drug Regulation of the National Medical Products Administration (NMPA); Wang Junzhi, deputy head of an expert task force on vaccine development and academician of the Chinese Academy of Engineering; and Wang Huaqing, chief expert of the National Immunization Program of the Chinese Center for Disease Control and Prevention (CDC).

Next, I will give the floor to Mr. Li.

Li Bin:

Good afternoon, friends from the media! It is a great pleasure to meet with you here to introduce the progress of COVID-19 vaccination work in China. At present, in accordance with the decision and deployment of the Communist Party of China (CPC) Central Committee and the State Council, all localities are promoting vaccinations in a safer, more orderly and vigorous manner by distinguishing priorities, insisting on informed consent for voluntary and free vaccinations, integrating regular prevention and control with vaccination work, and undertaking due responsibility and industry supervision responsibilities in a prudent and orderly manner in accordance with the law. China has administered 64.98 million doses of COVID-19 vaccines as of March 14. At present, we are organizing the implementation of vaccination following a sequence of administering vaccines to key groups, high-risk groups and then the general public, and steadily increasing the vaccine coverage rate.

The first step is to vaccinate key groups. These groups include people facing a higher risk of occupational exposure, people at risk from overseas infections and people in key positions that maintain the basic operation of society, as well as people over 18 years old who live in border counties. We also include people who work in industries with higher risks of virus transmission such as the service industry and labor-intensive industry, some senior citizens who basically maintain good health but need to be vaccinated for special reasons, and other key groups decided by industrial authorities. At present, the vaccination of key groups is progressing in an orderly manner.

The second step is to vaccinate high-risk groups, which mainly include elderly people and people with underlying diseases. As data on the protective efficacy of the vaccine in these groups from clinical trials is not yet sufficient, vaccination of these groups will be arranged according to the progress of vaccine development. The mass vaccination of these groups will be carried out in a timely manner once sufficient data on vaccine safety and efficacy are available from clinical trials.

The third step is to widen the inoculation to the general public. In this stage, we will administer COVID-19 shots to the rest of the public who are willing to get vaccinated except for the above-mentioned two groups. Our ultimate goal is to effectively protect the health of all people.

In order to ensure the smooth progress of the inoculation, we have mainly done the following work.

First, we have urged the relevant departments and local governments to perform their due responsibilities. A working mechanism of "daily reporting, weekly scheduling and semi-monthly announcement" has been in operation, and a monthly dynamic adjustment mechanism for vaccination supply and demand has been established. All relevant departments have shouldered their responsibilities to see that all vaccination tasks are fulfilled properly. Vaccination is the main task of epidemic prevention and control and has been carried out in all provinces. All localities have strengthened the coordinated management of vaccine supply within their jurisdictions, and accurately calculated the demand for vaccine use according to the vaccination plan and the capacity to guarantee services. Vaccine delivery and quality supervision of stored vaccines, as well as specific inoculation responsibilities, are implemented at the municipal and county levels. At present, localities have formulated step-by-step vaccination plans based on the statistical situation of various groups of people and set detailed timetables, so that the vaccination of various groups of people are advanced steadily and seamlessly. For people who have not yet completed vaccination, timely arrangements should be made. We can also move ahead of the vaccination schedule when it is possible. In these ways, the inoculation plans are arranged with national-level coordination. At present, the State Council's interagency task force has sent 15 instructor groups to various provinces to ensure that all measures are put in place.

Second, we are making every effort to roll out vaccination. The State Council's interagency task force has established relevant work systems to coordinate the supply of vaccines nationwide and strive to ensure that vaccines are produced at full capacity and expand capacity. The relevant departments have stepped up efforts to coordinate the supply and demand of vaccines, regulate the storage and transportation of vaccines, improve the efficiency of distribution, and guarantee the supply of vaccines. All localities set up sufficient vaccination stations with enough personnel and equipment, according to the amount of people that need vaccination and the amount of people that have been vaccinated. Vaccination workers must receive training before they are qualified for the job. They must strictly adhere to the principle of "three checks, seven verifications and one match" to ensure safe and standardized vaccination, including checking the recipient's health condition, contraindications and their vaccination cards and also recording the appearance, batch number, and expiration date of the vaccine and syringe. They must also verify the recipient's name, age, and the vaccine's product name, specification, dosage, injection site, and route of administration, and ensure that the information of the recipient, vaccination card and vaccines are all matched.

Third, we strictly implemented vaccine control measures. In terms of traceability, the country established a platform for nation-wide, coordinated, and electronic vaccine tracing, with stipulated information from various regions being reported to the platform in a timely and accurate manner. This enables the full traceability of vaccines covering the source and whereabouts. In terms of distribution and usage safety management, disease prevention and control departments and vaccination units made great efforts in strictly controlling vaccines on their way in and way out, and regularly monitor and record temperatures of COVID-19 vaccines during storage and transportation, so as to ensure safety. 

Fourth, we strengthened efforts to guarantee treatment for adverse events following immunization (AEFI). Class-two general hospitals and above were organized to provide medical treatment at vaccination spots they have been paired with. Experienced personnel for emergency treatment were sent to offer on-site support with necessary medical equipment and medicines. Ambulances were stationed on site. Personnel participating in medical treatment were given strict training to make sure suspected AEFIs can be identified in a timely manner and treated immediately. We made all-out efforts in organizing medical treatment, with barriers cleared for referrals and green paths for treatment established. 

Fifth, we carried out science popularization activities. We made timely releases of information relating to the safety and efficacy of COVID-19 vaccines, as well as knowledge regarding which kind of people the vaccines are suitable for and what to keep in mind during vaccination. This was done via official websites and official accounts on WeChat. We offered timely answers for the questions in people's mind, cleared their doubts, and earned the public's cooperation for the vaccination task. 

I just offered a brief introduction. Next, my colleagues and I will answer your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Li. Now we will start to answer questions. Please state the news outlet that you work for before asking questions. 

CCTV: 

Many residents have received the notice for vaccination. Some others haven't. Are there means for them to get inoculated if they want to? Can they make appointments on their own and then go to vaccination spots for inoculations? Thank you.

Li Bin: 

We made comprehensive arrangements for this type of work to be carried out in an orderly manner when conducting the vaccination task. Mr. Chang will introduce the relevant information. 

Chang Jile:

Thank you for the questions. Mr. Li just mentioned that, high-risk groups will first get inoculated with COVID-19 vaccines, then high-priority groups, and finally other groups, according to the country's unified arrangement. Currently, all regions are devising practical plans to inoculate different groups of people at different stages according to the nation's overall arrangement. As far as we know, the current vaccination efforts around the country are mainly focused on target groups, most of which are involved in key industries and key places, and are mainly organized centrally by the units where they work, while some temporary vaccination points have been set up in places where target groups work and live. If a few targeted people couldn't take part in concentrated inoculations for personal reasons, they may get inoculated at vaccination units nearby afterwards, though, they need to contact vaccination units in advance, or they can make appointments according to the requirements of local health administrations, disease control departments and vaccination units. The vaccination task this time targets large groups of people and involves numerous vaccination spots. Many vaccination spots have been increased or set up for temporary use. Existing vaccination spots have expanded service capabilities. We are constantly optimizing vaccination services. We will also make timely public releases of information related to vaccination spots. People with questions about the inoculation of COVID-19 vaccines may consult local health departments, disease control institutions or vaccination units, online or via telephone. In short, we are currently advancing the inoculation of COVID-19 vaccines in an orderly and effective way, in accordance with the unified arrangement of the joint prevention and control mechanism of the State Council. We hope that all people will cooperate for this task to be done and get inoculated as early as possible to gain protection. Thank you.

ThePaper.cn:

Surveys show that many Chinese are willing to get inoculated with the COVID-19 vaccines, but some have hesitations about the safety of the vaccines and have showed less willingness. How will you clear people's safety-related concerns? Thank you.

Li Bin:

This is a very good question. As I just mentioned, the basic principle of inoculation of COVID-19 vaccines in our country is for people to voluntarily get inoculated with informed consent. The number of inoculations is directly related to people's willingness to get inoculated. So, we have always paid attention to this issue when conducting the vaccination task, seeing it as the priority. We have been following up and doing research regarding this issue. According to what we have learnt, inoculation willingness is influenced by many factors and shows quite large changes. At present, there are two main factors impacting inoculation willingness. One is the epidemic prevention and control situation. Our country has taken powerful and appropriate measures in this field, and as a result, the situation has been stable, generally speaking. Therefore, this makes some people think that the risk of infection is rather low and there is no need to get inoculated for additional protection for the time being. The other one is that because the COVID-19 vaccines are new to the market, some people want to see more information about the efficacy. Many people are eager to know about safety data and efficacy issues, planning to get inoculated once more knowledge of the vaccines is known. These are the two factors that have the largest impact on the issue at the moment. 

Here, I would like to share something with you. First, regarding infection risks, although China's overall situations for epidemic prevention and control currently remain stable, there remain risks of infected cases importing the virus as well as localized outbreaks among individuals and across society. For the vast majority of people, if we have no immunity against the novel coronavirus, the possibility of infection will continue to exist, and some of us will likely show severe symptoms after getting infected. Therefore, vaccination is the best way to prevent COVID-19. Vaccination can effectively protect both individuals and society, and reduce infection, severe illness, and death rates. This is therefore the main strategy to prevent and control COVID-19 in the country at present.

Second, the more people who have been vaccinated, and therefore have immunity, means that we can effectively control the spread of the novel coronavirus. Vaccination can protect not only ourselves and our families but also the rest of society.

Third, regarding the vaccination effect, all the vaccines can be used in China only after they have undergone clinical studies in line with relevant domestic regulations. They must then be approved by the national medical products authorities and pass strict verifications. In the process of storage and transportation, all vaccines must be monitored and have their temperatures recorded at regular intervals to ensure that they meet the requirements regarding temperature environment and transportation. For vaccinations, we have expanded our personnel training and asked all medical staff to strictly implement operating instructions to guarantee the effectiveness and safety of vaccines.

With the development of vaccination work, the number of vaccinated people has increased, so I believe immunity will further rise. We hope more people will actively take part in vaccinations at an early date so that we can witness the protective effect of vaccines together. Thank you.

CRNTT:

What is the suggested time between getting the COVID-19 vaccine and other vaccines? Is it possible to encounter an adverse reaction if you receive other vaccines after getting this one? Since China has carried out a massive domestic vaccination program, when are we expected to reach herd immunity? Thank you.

Li Bin:

This is a very specialized question, so I would like to invite Prof. Wang Huaqing to answer it.

Wang Huaqing:

Thanks for your question. Because the COVID-19 vaccine is new, the question you asked is not only a question that concerns the public but also one that professionals must conduct research on. Some time ago, we organized some experts to study and verify this issue. In order to monitor adverse reactions, suspected adverse reactions, and other considerations, we have studied whether tour novel coronavirus vaccine can be used simultaneously with other vaccines, and if not, how much time should there be between receiving vaccinations. Our findings show that at least two weeks' gap should be guaranteed between the COVID-19 vaccine and other vaccines. But in some special instances, the two weeks' recommendation can be waivered. For example, if someone has to be vaccinated against rabies or tetanus after being bitten by animals or are suffering trauma.

We all know that vaccines are external antigens that enter the human body. There will likely be some adverse reactions after vaccination, most of which will be normal reactions that will get better without treatment. However, sometimes there may be suspected adverse reactions with more severe symptoms. If that is the case, we recommend that the person goes to the hospital to receive timely diagnosis and treatment. During this process, if the doctor suspects that the adverse reactions were caused by the vaccine, the case will be reported and further investigation and diagnosis will be followed. In the future, we will continue to monitor and evaluate adverse reactions and suspected adverse reactions related to both the COVID-19 vaccine and other vaccines.

Just now you mentioned the issue of the immunological barrier, which is something that is of particular concern to the public, and also the direction in which we have been working hard. Everyone knows that COVID-19 is a disease that most or all the public is susceptible to. It has a very high severe co-morbidity rate for people with chronic diseases and the elderly, while some people may eventually lose their lives due to severe illness. According to the results of global monitoring, the global case fatality rate exceeds 2%, which is also relatively high. Under the circumstances, the key for us in controlling this disease is to rely on vaccines. As for other non-vaccine measures, China has made great efforts in various aspects in the early stages. The cost of taking non-vaccine prevention and control measures together has also been very high. We hope that in the future we will build an immunological barrier through vaccination. This is also the conclusion of our experience in controlling past infectious diseases.

Regarding the establishment of herd immunity, this has a lot to do with the protective efficacy of the vaccines and the population's vaccination rate. In the past, we eliminated smallpox and formed a population immunity of around 85% — that is the population immunity, not the vaccination rate. This means that the rate of people with immunity accounted for 85% of the whole population. Measles, which is more contagious, requires 95% of the population to be immune to block the disease. We have eliminated smallpox, and put forward the goal of eliminating measles. The goal of elimination is to prevent it from spreading, so the population must have high immunity.

COVID-19 vaccinations should be carried out step by step. The first step is to consider key populations, those with key jobs and who are at high risk of infection. The second step involves people who may be at risk of severe illness, and the third step involves other groups. In the end, all eligible members of the public will be vaccinated. This is the basis for the establishment of an immunological barrier or herd immunity. Of course, the establishment of such an immunological barrier requires efforts from all sides, including the public. Therefore, we hope that members of the public who received COVID-19 vaccination appointments will actively cooperate, and get vaccinated. Let's work together to build an immunological barrier, so that our studies, work and lives can return to normal. Thank you.

Reuters:

We have heard many times about production capacity, and are particularly concerned about the issue of output. What is the actual production volume of the four COVID-19 vaccines currently on the market in China? For example, what are the actual daily, weekly and monthly outputs? Or, how many have been produced so far? Also, in terms of these four vaccines, what is the difference between actual production output and designed production capacity? Why is there such a difference? Just now you mentioned some goals. What are the actual production plans for these four vaccines? How many doses of vaccine are actually planned to be produced, by certain specific times? Thank you.

Li Bin:

You've asked a combination of several questions. I'd like to invite Mr. Tian Yulong to introduce the relevant situations.

Tian Yulong:

Thank you for your questions. You are very professional and concerned about the issue of vaccine production. According to the overall deployment of the State Council's interagency task force, the MIIT has taken the lead in working with the NHC, the NMPA and other relevant departments to ensure the supply of COVID-19 vaccines. Your concerns are regarding production. At present, four vaccines have been granted conditional approval, including three inactivated vaccines from Sinopharm CNBG Beijing, Sinopharm CNBG Wuhan and the Beijing-based Sinovac Biotech, as well as a Chinese adenovirus vector vaccine from the Tianjin-based CanSino Biologics. These four companies have begun organizing mass production. Just now, Mr. Li Bin explained that we have completed more than 60 million vaccinations, so we have met the current supply and demand pretty well. You will have also seen our donations to other countries, with our exports receiving positive feedback — so, we have also supported international demand.

It appears that domestic vaccine production is still expanding. With the continuous release of production capacity, the output will gradually increase. This reflects China's institutional advantages, industrial mobilization capabilities, and enterprises' advantages in efficient organization. During the Spring Festival, vaccine enterprises worked overtime and raced against time to organize production at full capacity, which also reflects our people-centered philosophy. According to the current production plans, we have established a dynamic guarantee balance mechanism for production supply and demand. We must accurately measure demand and implement vaccinations step by step, so that the accurate connection between production and supply can be guaranteed. Our continuous release of vaccine output and production capacity at all stages throughout the year has met the needs at all stages. Therefore, we are still very confident, because China's industrial mobilization, emergency response capabilities and corporate capabilities of organizing production are highly efficient.

One thing particularly important is that vaccines are different from other anti-epidemic supplies and medicines, and it is crucial to ensure absolute quality and safety throughout the entire vaccine production chain and process. The production process is very complex, with many production steps and high technical content, and market access and supervision are also very strict. We and the drug regulation authorities have cooperated in ensuring quality and safety and every batch of vaccines must undergo a necessary period of production testing. During the period, safety must be ensured in every procedure, and measures like testing must be intensified. We must make safety and quality the bottom line in capacity release, production and supply. On this premise, our production capacity is constantly expanding. We and the health authorities have established a dynamic, precise and balanced mechanism for vaccine production and supply to meet vaccination demands, and I believe we will be able to complete our task successfully. Thank you. 

South China Morning Post:

We know that there is demand for Chinese vaccines in many countries and that China itself has to build up an immunization barrier for its own entire population, so is there a priority? How do you balance the demand for vaccines at home and abroad?

Tian Yulong: 

Vaccine is an important field of current anti-epidemic cooperation in international community. We can see from the news that while prioritizing meeting domestic demand, China has taken practical actions to implement President Xi Jinping's announcement about making COVID-19 vaccines a global public good. We have actively promoted international cooperation on vaccine and won recognition from the international community. 

At the end of February, the Ministry of Foreign Affairs released information that China had been providing vaccine aid to more than 50 countries and exporting jabs to 27 countries. As China's vaccines become more and more popular, we believe that more countries will accept them. China's production capacity will continue to be released and output will continue to expand, and so will our supply both at home and abroad. While ensuring that domestic needs are met, we will keep increasing our assistance and exports to other countries and jointly fight against the epidemic. We are confident that China's high-quality, safe vaccines will be welcomed by more countries and we are willing to make more efforts in this regard. Thank you. 

China Media Group:

Currently, China has approved four types of COVID-19 vaccines for market launch. What are their differences, and the advantages and weaknesses of each? 

Li Bin: 

This question goes to Mr. Wang. 

Wang Junzhi: 

The four categories of COVID-19 vaccines are developed through two approaches. The difference is that three of them are inactivated vaccines and one is an adenovirus vaccine. The inactivated vaccine uses physicochemical methods to inactivate the live virus after its activation and expansion and then purify it. The vaccine's character is that its component is the most similar to the structure of the natural virus. Therefore, it gives a strong immune response and safety is ensured. The vaccine is stable to be stored at 2-8 degrees Celsius for two to three years, and is easy to be transported, which is convenient for people in remote areas. This vaccine requires two shots. As for the adenovirus vaccine, we take Ad5 as the vector, introduce COVID-19 antigens, and then make viral vector vaccines with bioreactors. This production technology is relatively easy and the cost is low, because it was based on our original Ad5 Ebola vaccine. This type of vaccine can not only generate neutralizing antibodies but also improve cellular immunity, using a one-dose immunization procedure. The one-dose immunization is really convenient for specific populations with emergency needs.

No matter what approaches we take, the most important thing is to adjust to the features of the antigens and pathogens, and use the most suitable technology to develop safe, effective and quality-controlled vaccines. That is the most crucial criterion for vaccines to work. Thank you. 

Bloomberg:

China announced a vaccine passport last week, aimed to allowing citizens to travel internationally. That will only work if you can get other countries to recognize it. What outreach is China making on this front, and have any countries said they'll recognize China's passport? 

Li Bin:

We are actively working in this field. First, we have paid close attention to the policies and measures adopted by each country after administering COVID-19 vaccines. This includes the international issue of recognizing people who have been vaccinated, which you mentioned. Second, we have been actively studying relevant policies, which are currently undergoing adjustments and improvements. Relevant departments of the interagency task force have been leading the work, and we will publish detailed rules once the policies have been approved. By adopting these policies, we aim to further promote COVID-19 vaccination, and boost international communication and exchanges. Thank you.

Cover News:

Besides the four approved vaccines which are already available on the market, how is the development of other vaccines progressing? It has been reported that teams headed by Chen Wei and Zhong Nanshan, both academicians with the Chinese Academy of Engineering, have deployed new vaccine research and development. What is the special significance of the new vaccines currently being developed? Thank you.

Wang Junzhi:

As we know, 17 Chinese COVID-19 vaccines are currently going through clinical trials, four of which have been approved under certain conditions, and another three technological approaches are either in phase 3 clinical trials or will enter phase 3 clinical trials shortly. The public are all very interested in their progress for the future. For these vaccines, two tasks must be accomplished before they can enter the market. First, we must ensure that the data on safety and effectiveness for phase 3 clinical trials meet relevant requirements. Second, we must complete the commercial-scale production process verification, and establish reliable quality standards. We need to collect sufficient data from clinical trials. This is not an easy task, because we have faced great difficulties in doing phase 3 clinical trials, which are done abroad. Once there is enough data to show that a vaccine is as effective as it is designed and that it has an acceptable safety profile, the applicant can submit the marketing application to the NMPA. The NMPA will immediately complete the reviewal process, and ensure that safe and effective vaccines can be available on the market as soon as possible.

China News Service:

If the number of new COVID-19 vaccines approved for the market increases, the whole of society will be concerned about their quality and safety. What measures will the NMPA take to enhance the supervision of vaccine quality? Thank you.

Li Bin:

This question is very clear, so I'd like to invite Mr. Yuan Lin, head of the Department of Drug Regulation of the NMPA, to introduce the situation.

Yuan Lin:

Thank you for your question. This is a very important issue that has generated much interest, and is also related to concerns over safety for people who have been vaccinated. Through years of efforts, and along with the rapid development of the economy and society, China has established a fairly complete vaccine regulatory system, a relatively comprehensive legal system and a comparatively sound vaccine quality standards system. We have implemented good manufacturing practices (GMP) in line with advanced international standards, and China's vaccine regulatory system has twice passed the evaluation of the WHO's national regulatory system. As such, it can be said that our vaccine regulation has been internationally recognized.

Especially since the outbreak of COVID-19, the NMPA has resolutely implemented a series of important instructions given by General Secretary Xi Jinping on COVID-19 vaccines, and implemented decisions and arrangements of the CPC Central Committee and the State Council. In particular, in the aspect of implementing the "four strictest" regulatory requirements for vaccines, a series of strong and effective measures have been taken to ensure the quality and safety of the COVID-19 vaccines.

It is well known that with regards to laws and regulations, China is the only country in the world that has introduced a specific law on vaccine management, which is the Vaccine Administration Law. On that basis, we have formulated a series of supporting rules and regulations and put in place requirements on technical specifications, ensuring that all vaccine-related companies, including distribution companies, as well as vaccination centers and regulation authorities can act in line with relevant laws and rules, and all of our work can be carried out in an orderly manner within the legal framework. To ensure the quality of vaccines, by adhering to the laws, regulations and supervision, and being responsible for the people, we have made it clear that vaccine manufacturers are primarily responsible for ensuring the quality and safety of vaccines. We require that vaccine manufacturers assume the main responsibilities in accordance with the law. They are required to act as follows: First, they must strictly abide by the Good Manufacturing Practice (GMP) for Drugs. Second, they must ensure that products are produced according to approved manufacturing techniques and standards. The process of vaccine manufacturing is relatively complex and missteps can be caused by oversights. Meanwhile, to further ensure the quality and safety of vaccines, we require manufacturers to conduct strict testing before releasing vaccines and take responsibility for pharmaceutical marketing, including strictly following requirements on transport, delivery and cold-chain logistics. At the same time, we require manufacturers to actively collect and analyze information on adverse reactions that occur during vaccination work. The aim of all these measures is to ensure the safety and quality of vaccines throughout the entire management chain. 

For regulation authorities, we used a combination of measures to tighten supervision and law enforcement. We just mentioned that four manufacturers have been granted conditional market approval for vaccines. We organized comprehensive and systematic inspection tours of these companies in a timely manner. Meanwhile, we organized inspections of relevant workshops to ensure that they were licensed. We also arranged for expert inspectors from national and local drug regulatory authorities to carry out inspections and spot checks regularly or periodically. One of the important measures we have organized is for a team of at least two inspectors stationed in the manufacturers to supervise different aspects using various measures, to supervise and guide companies to improve their management system and ensure their manufacturing processes are in line with laws and regulations, in a bid to ensure vaccine quality. With the joint efforts and coordinated cooperation with relevant departments, we are working together to use information technology to track vaccine information, monitor suspected adverse reactions during vaccination and offer proper handling, and crack down on vaccine-related crimes and violations in accordance with the law. 

By taking various, effective measures, we will ensure the safety of COVID-19 vaccines in a comprehensive manner and lay a solid foundation for the vaccination work. Thank you.

Red Star News:

Recently, blood banks in some parts of the country have been facing blood shortages. Those in charge of local departments have said that this is related to the COVID-19 vaccinations. What impact will COVID-19 vaccinations have on blood donation? When can vaccine recipients donate blood? Are blood stocks still able to meet people's needs? Thank you. 

Li Bin:

This is a very important question. Health care authorities have always attached great importance to the safety and supply of blood. Ensuring blood supply is one of our major tasks. During the vaccination work, we have been paying attention to the question of how to ensure the effective blood supply. Mr. Chang will introduce the details. 

Chang Jile:

Thank you for your question. The safety of blood supply has a direct bearing on clinical and medical treatment services. The NHC has always attached great importance to the implementation of the Blood Donation Law, and made great efforts to encourage the public to participate in voluntary blood donation. The amount of blood collected from voluntary donors in China has increased for 20 consecutive years, with all blood donated for clinical use undergoing nucleic acid testing. China ranks among the top countries in the world in terms of ensuring the safety of blood supply. We have also used information technology to establish a monitoring and early warning system on blood inventories across the nation and a coordinating mechanism to guarantee supply. Through the national management system of blood inventories, 452 blood banks across the country share their information with one another and can timely monitor the collection and storage of blood in different places. In the case of a transient blood shortage or low supplies of certain blood types in certain areas, we immediately kick-start the coordinating mechanism and timely allocate blood from blood banks where storage is sufficient to ensure supply.

Regarding the impact of vaccination on blood donation, in the light of the current blood donor eligibility criteria and different types of vaccines inoculated, the suspension of blood donation ranges from 24 hours to four weeks. In addition, according to the Blood Donation Law, there should be an interval of no less than six months between donations. Since the COVID-19 vaccination campaign launched, we have strengthened the monitoring and allocation work of blood storage and rolled out a system which includes daily monitoring and reporting. As of now, the national level of stored blood is above the security line. The blood supply is stable and can basically meet the demands for clinical use. Initially, to ensure the safety of blood donors and vaccine recipients, following the principle of being proactive and prudent, we organized experts to study this question. We have also taken common international practice into consideration with regards to the suspension of blood donations after inoculation by the COVID-19 vaccine. 

As the inoculation of COVID-19 vaccines is proceeding worldwide, the delay periods for blood donation after vaccination have been successively updated and released internationally. Therefore, in line with the principle of scientific prudence, we have also organized experts to conduct a study to determine the time to suspend blood donation after vaccination against the new coronavirus. Next, we will continue to strengthen the education and mobilization of voluntary non-remunerated blood donation, and encourage healthy citizens of the right age to actively donate blood without compensation. On the other hand, we will guide clinics to strengthen the rational use of blood, and at the same time closely monitor the situation of blood stocks nationwide, make timely deployments and do a good job in guaranteeing clinical blood use. Thank you.

The Straits Times: 

In the beginning, China's vaccination program appeared to be ahead of all other countries, but the rate of inoculation seems to have slowed in recent months. Is this because of the hesitation that you mentioned earlier? And other plans to release more clinical trial data so people are less worried? 

Li Bin:

Just now I briefed you on the current situation of vaccination. So far, 64.98 million doses of COVID-19 vaccine have been administered in China, and the inoculation program is now being promoted in a steady and orderly manner. We have been paying close attention to public's willingness to get vaccinated during our inoculation work. Next, we will vigorously advance the vaccination program and constantly improve vaccine rollout.

Guangming Daily:

We know that vaccines are products that need tight supervision. They have to go through the lot release process before they are authorized for the market. Can China's current lot release capacity meet the demand for the large-scale production of COVID-19 vaccines? Thank you.

Li Bin:

Mr. Yuan will answer this question.

Yuan Lin:

Thank you for your question. Vaccines are products that need key and strict regulation. Lot release must be taken as the bottom line or even the red line to ensure the quality and safety of the vaccines. At the same time, lot release is also an internationally accepted, effective and powerful regulatory measure for vaccines and other biological products. I mentioned China's Vaccine Management Law just now—the first of its kind in the world which took effect on Dec. 1, 2019. The law clearly stipulates that vaccines entering China's market, both those produced domestically and imported ones, should undergo the lot release process in accordance with the law. More specifically, each lot of vaccines, before their release onto the market, need to be tested and approved by nationally recognized lot release institutions. The NMPA attaches great importance to enhancing China's lot release capacity, and has made timely and comprehensive analyses of the country's current strength of vaccine production and lot release. With the strong support and coordination of relevant departments, we have planned ahead and adopted phased and step-by-step measures in advance to further intensify and accelerate the capacity building of biological products lot release and of the relevant testing institutions. What gratifies us is that at present, the national medical products testing institutions and those at the provincial (municipality) level including Beijing, Hubei and Guangdong, have all gained the capacity to carry out lot release for COVID-19 vaccines. Meanwhile, we are actively promoting the capacity building of other provincial-level drug testing institutions. It is expected that a dozen new institutions will be able to conduct lot release for vaccines in the near future, which will continuously meet the needs for coronavirus vaccine lot release in China.

Simultaneously, we are stepping up efforts to constantly improve our testing quality and efficiency to keep pace with the production capacity of COVID-19 vaccines. We require all the lot release institutions to strengthen their management, to conduct tests on the safety and effectiveness of vaccines in accordance with legal requirements and national standards, and to ensure the quality of the lot release work. To actively keep pace with the country's rising production capacity of the coronavirus vaccines, we demand that on the premise of ensuring quality, testing institutions should tap internal potential and improve efficiency. We also require that the institutions' testing work and vaccine manufacturers' statutory self-checks are started, conducted and completed simultaneously, which has greatly shortened the time it takes for COVID-19 vaccines to enter the market. Through the continuous efforts of the national medical products administration system to enhance the lot release capacity, we can fully ensure the effective coordination and consistency of the coronavirus vaccine lot release capability and manufacturers' continuously increasing production capacity and output. This will ultimately guarantee the smooth administering of COVID-19 vaccines. Thank you. 

Economic Daily:

How is the raw material supply for vaccine production? Can the production and supply of key materials be guaranteed? What measures have been taken to ensure the production of materials and the stability of production and supply chains? Thank you.

Li Bin:

I'd like to invite Mr. Tian Yulong to answer these questions. 

Tian Yulong:

Thank you for your questions, which I think are very important. A stable and adequate supply of materials is essential to vaccine production. The MIIT accumulated significant experience in this regard while ensuring the supply of medical products last year. Thanks to the integrity of our industrial system and our ability to mobilize, organize and respond to emergencies, we established an industrial chain connecting upstream and downstream companies. The experience was helpful for us to adopt good measures in accurately connecting and ensuring the smooth operation of supply and industrial chains, and upstream and downstream vaccine production systems.

Our measures focus on two aspects. The first is to ensure the stability of the vaccine production chain. Vaccine production involves multiple links, including the supply of equipment on production lines, raw materials, auxiliary materials, packaging materials, cold-chain equipment for the transportation of vaccines, and the equipment required for vaccination. All these links require stable production and supply chains. We have focused on coordinating the production, procurement, and supply of these materials. At present, China has a complete vaccine production system; the supply of raw and auxiliary materials is orderly, stable, and sufficient enough to support large-scale production now and for some time to come. We are quite confident of this. This is the most important foundation for ensuring large-scale production and the supply of vaccines needed for the inoculation program.

The second aspect is the supply chain. To ensure the safe, efficient and quick transportation of vaccines to inoculation and distribution venues, we need to establish a logistics chain, a testing chain, and other relevant chains for upstream and downstream companies. These chains are critical for orderly, efficient, smooth, and safe production, as well as testing and the use of vaccines. The MIIT and relevant departments have established sound mechanisms for efficient cooperation to ensure not only steady production but also efficient transportation and supply of vaccines. So, please rest assured.

Hong Kong Economic Herald:

The impact of mutations on the efficacy of COVID-19 vaccines has drawn both domestic and international attention. Regarding the vaccines approved for conditional marketing in China, how effective are they against coronavirus mutations? Thank you.

Li Bin: 

I'd like to invite Mr. Wang Junzhi to answer the question.

Wang Junzhi:

This is an issue of great concern both at home and abroad. Currently, we haven't found that mutated COVID-19 strains have had an obvious impact on the efficacy of domestic vaccines approved for conditional marketing. Companies developing the vaccines have conducted cross-neutralization tests and evaluations on mutant virus strains using immune serums. The latest study report still shows no obvious decrease in the neutralizing activity of both the inactivated vaccine and recombinant protein vaccine against new COVID-19 strains, including the strain discovered in South Africa. However, more follow-up studies are needed.

We need to attach great importance to this issue. The long-term spread of the virus may result in the accumulation of multiple mutations. When the accumulation reaches a certain level, it may undermine the protection given by vaccines. This risk does exist. In order to effectively counter the influence of virus mutations, we must take precautionary measures and actively prepare for this. I think the following two aspects are very important. First, we need to carry out close and real-time monitoring, collect variants quickly once they are detected, and then perform tests on them to identify their impact on vaccines. Second, we need to step up the development of vaccine platforms. By arranging five technical routes, China has already established a powerful platform for vaccine R&D. In addition, we are taking proactive measures to develop a new generation of vaccines so that we can roll out effective vaccines as quick as we can against new variants once mutations are proven to eliminate or greatly reduce the efficacy of existing vaccines. This is critical.

Generally, we need to improve our comprehensive capabilities to better deal with virus mutations in the future. This is the most important thing to do. Thank you.

Shou Xiaoli:

The State Council's interagency task force briefing today is hereby concluded. Thank you all. Goodbye.

Translated and edited by Liu Sitong, Zhou Jing, Lin Liyao, Wang Zhiyong, Zhang Rui, Liu Qiang, Liu Jianing, Fan Junmei, Cui Can, Zhang Junmian, Xu Xiaoxuan, Li Huiru, Zhang Liying, Wang Qian, Wang Yiming, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council

Deng Zhonghua, deputy director of the Hong Kong and Macao Affairs Office of the State Council

Zhang Yong, deputy director of the Legislative Affairs Commission of the Standing Committee of the National People's Congress (NPC)

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

March 12, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office. As you all know, the fourth session of the 13th National People's Congress (NPC), which concluded yesterday, adopted the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region (HKSAR) by an overwhelming majority vote. To help the public more accurately understand the decision from both legal and logical perspectives, we have invited Mr. Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council, Mr. Deng Zhonghua, deputy director of the Hong Kong and Macao Affairs Office of the State Council, and Mr. Zhang Yong, deputy director of the Legislative Affairs Commission of the Standing Committee of the NPC. They will elaborate on the decision and take your questions. First, we will give the floor to Mr. Zhang Xiaoming.

Zhang Xiaoming:

Friends from the media, good morning. Yesterday afternoon, the fourth session of the 13th NPC adopted the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region. The decision is another major step in the governance of Hong Kong taken by the central authorities following the adoption of the Law on Safeguarding National Security in the Hong Kong Special Administrative Region. It is also a milestone in implementing the principle of "one country, two systems." The NPC has made major decisions on Hong Kong-related issues both this year and last year. This fully demonstrates the great importance attached to Hong Kong affairs by the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, and General Secretary Xi Jinping's general plan of the governance of Hong Kong. When the vote on the draft decision was held, Mr. Zhang Yong and I were at the Great Hall of the People. A total of 2,896 NPC deputies cast their votes. Except for one abstention, all the other 2,895 deputies voted in favor. A big round of applause broke out when Li Zhanshu, chairman of the NPC Standing Committee, announced the result. The sustained applause represents the shared aspiration of the Chinese people, including all our compatriots in Hong Kong, and the unshakable will of the state.

At a workshop held by the Chinese Association of Hong Kong and Macao Studies on Feb. 22, Xia Baolong, vice chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and director of the Hong Kong and Macao Affairs Office of the State Council, elaborated on the theme of implementing the principle of "patriots administering Hong Kong" put forward by General Secretary Xi Jinping, and advancing the steady and sustained implementation of "one country, two systems." Xia's statement has drawn a positive public response in Hong Kong. On March 5, Wang Chen, vice chairman of the NPC Standing Committee, made a detailed explanation of the necessity and importance of improving the electoral system of the HKSAR as well as the main points of the draft decision. On March 6 and 7, Vice Premier Han Zheng made important remarks on matters related to improving the HKSAR's electoral system while attending group discussions of Hong Kong and Macao CPPCC members and NPC deputies. These state leaders clarified the position of the central authorities. Here, I would like to share some views on the great significance and far-reaching impact of improving the HKSAR's electoral system.

First, improving the electoral system is highly necessary to address the loopholes and deficiencies in the HKSAR's legal system, and is conducive to improving the system and institutions of "one country, two systems." The framework of the existing methods for the selection of the HKSAR chief executive and for the formation of the Legislative Council (LegCo) was established in the process of formulating the Basic Law of the HKSAR over 30 years ago. The instability in Hong Kong society during recent years has exposed clear loopholes and deficiencies in the HKSAR's existing electoral system, including the methods for selecting the chief executive and for the formation of LegCo. In particular, the electoral system was not secure enough. As a result, anti-China disruptors in Hong Kong found their way into the HKSAR's bodies of power and other governance structure through elections; and external forces have meddled in Hong Kong's affairs through various means, allowing them to engage in activities aimed at undermining China's national security. Therefore, we must fix the deficiencies, and forestall and defuse relevant risks at the institutional level. Moreover, improving the electoral system is an important step toward implementing the overarching plan of upholding and improving the system and institutions of "one country, two systems" made by the 19th CPC Central Committee at its fourth plenary session. It also shows that the principle of "one country, two systems" has been refined in light of new developments.

Second, improving the electoral system is of fundamental importance to safeguarding political stability and security in the HKSAR, and ensuring a stable Hong Kong in the long run. The turbulence over the amendment bill descended into social chaos, which fully reveals that the main problems facing Hong Kong are political issues, not problems of whether the electoral system should be democratic, or whether the pace of democracy should be faster or slower, as some people have said. These issues involve battles against attempted power grabs, subversion and infiltration. In this regard, we will not back down. The aim of improving the electoral system is to close the pathway within the political structure for anti-China and destabilizing forces in Hong Kong to seize power by exercising the central authorities' statutory power to make decisions on the political structure of the HKSAR in accordance with the Constitution and the Hong Kong Basic Law. It goes hand in hand with the formulation of the Law on Safeguarding National Security in the HKSAR. Together, they will provide fundamental solutions to various forms of chaos, and safeguard the national security and the political stability and security of the HKSAR.

Third, improving the electoral system is the right choice based on Hong Kong's actual conditions, and a step which will steadily advance Hong Kong's democratic system. For the over-150 years that Hong Kong was under British colonial rule, there was no democracy to speak of. It was only since its return to the motherland that its people have truly held their future in their own hands. The development of democracy in the city does not have a long history and steady improvements should be made to it through exploration. In improving the electoral system, priority will be given to adjusting and improving the Election Committee, which is broadly representative, and empowering it with new functions. In addition to continuing to elect the chief executive, it will also elect some members of LegCo and participate in the nomination of all LegCo candidate members. The aim of such an approach is to build a democratic system that is suited to Hong Kong's actual conditions and has distinctive Hong Kong features. It will ensure the pace of development of democracy in the city is steadier.

Fourth, improving the electoral system is crucial for Hong Kong to improve the performance of its government, promote development of its economy, and improve people's livelihood. The deficiencies in the current electoral system and its uncertain status have triggered a tendency to politicize Hong Kong society. Moreover, after finding their way into the HKSAR's governance system, anti-China and destabilizing forces in Hong Kong have blatantly manipulated the political agenda. Some opposition LegCo members have abused procedures and disrupted, and even paralyzed, the functioning of LegCo through such improper moves as filibustering. These acts have gravely impeded the exercise of governance by the HKSAR government and created significant internal friction. The improvements to the electoral system will enable the HKSAR government and people from various sectors of Hong Kong society to focus on economy and development, and will address housing difficulties and other pressing problems affecting people's livelihood. It will also enable Hong Kong to better involve itself in the building of the Guangdong-Hong Kong-Macao Greater Bay Area, integrate into China's overall development more smoothly, and maintain and improve its international competitiveness. In short, it will enable Hong Kong to break the political impasse, achieve good governance and improve the well-being of its residents.

Fifth, improving the electoral system will provide a systemic safeguard for implementing the principle of "patriots administering Hong Kong" and ensure the continued success of "one country, two systems". "Patriots administering Hong Kong" is not a new concept. In fact, Comrade Deng Xiaoping pointed out that Hong Kong must be administered by the people of Hong Kong with patriots as the main body in 1984 when he met a delegation from the Hong Kong industrial and business community visiting Beijing and a group of Hong Kong community leaders. Across the world, no country allows people who are unpatriotic to participate in the governance of the country or any place under the country's jurisdiction. It goes without saying that those who administer Hong Kong must be patriots. When meeting with Chief Executive Carrie Lam Cheng Yuet-ngor this January, General Secretary Xi Jinping clearly stated that the principle of "patriots administering Hong Kong" must be always upheld to ensure the steady and sustained implementation of "one country, two systems." Improving the electoral system will put in place the requisite security valve to ensure that the political power and the governing power of the HKSAR are firmly in the hands of patriots. This will provide a strong and reliable safeguard for ensuring the steady practice of "one country, two systems" in Hong Kong in the long run.

I want to emphasize that it was the CPC that initiated the policy of "one country, two systems," and that leads, advances and upholds its implementation. No one better appreciates the value of "one country, two systems" or is more committed to the original aspiration of this notion than the CPC or the Chinese government. The Law on Safeguarding National Security in the HKSAR which has been formulated, the ongoing improvement of the electoral system of the HKSAR , and everything we will do in the future, are all aimed at improving the system and institutions of "one country, two systems" and ensuring its sound implementation, rather than changing the principle.

During the "two sessions" over the last few days, many NPC deputies and CPPCC members from Hong Kong were excited when delivering speeches. Some NPC deputies said that the NPC's decision on improving the electoral system of the HKSAR will send a "belated spring" to Hong Kong. Some CPPCC members exclaimed that "Hong Kong can be saved." Other CPPCC members commented that this major decision of the NPC fully demonstrates the central authorities' deep care for Hong Kong and its future. As people in Hong Kong like to visit Che Kung Temple during the first lunar month and draw fortune sticks, some CPPCC members mentioned that no matter what kind of fortune the people receive, the Law on Safeguarding National Security in the HKSAR is the greatest blessing, and the NPC's decision on improving the electoral system of the HKSAR is the most effective solution. I think these words speak volumes about the views of people in Hong Kong. When we spoke with some Hong Kong personages, they mentioned a simile that, "just as a serious illness requires strong medicine, Hong Kong's existing electoral system requires a major surgery." I think "surgery" is a vivid illustration. To be more accurate, the improvement of Hong Kong's electoral system is like a minimally invasive surgical procedure with an incision that is small but deep enough to remove the infection and allow for a speedy recovery. We are firmly convinced that after the surgery on Hong Kong's electoral system, its democratic system will regain health. Hong Kong's social vitality will be fully unleashed, and its people will enjoy better and more peaceful lives. 

In recent days, the HKSAR government and people from various sectors in Hong Kong issued statements, took part in interviews, signed petitions, and set up street counters to express their firm support for the NPC's decision on improving the HKSAR's electoral system. Opinion poll results released by the Hong Kong Research Association also show that around 70% of those polled support the NPC's decision. This is the best and most forceful rebuttal of the smears and false claims against the NPC's decision made by some people overseas. Last year, when the Law on Safeguarding National Security in the HKSAR was promulgated, I said at a press conference here that the law is an anchor of stability for the city. Today, I would like to add another sentence and together make them a couplet of good wishes, that is, the improved electoral system will be a vital long-term safeguard for Hong Kong. As the city's electoral system and rules are amended, the ship of "Hong Kong under 'one country, two systems'" will be able to cleave waves, sail smoothly onward and deliver an even brighter future for the city.

That concludes my opening remarks. Thank you.

Chen Wenjun:

Thank you, Mr. Zhang Xiaoming. Next, let's give the floor to Mr. Zhang Yong.

Zhang Yong:

Thank you, Mr. Chairperson. Friends from the media, good morning. Just now Mr. Zhang Xiaoming, executive deputy director of the Hong Kong and Macao Affairs Office of the State Council, expounded on the major and far-reaching significance of the Decision of the National People's Congress on Improving the Electoral System of the Hong Kong Special Administrative Region. Next, let me give you a brief overview of the decision as well as its constitutional and legal basis.

The NPC's decision consists generally of the following nine articles:

First, it sets out the basic principles for improving the electoral system of the HKSAR, namely implementing the principle of "one country, two systems," upholding the constitutional order, ensuring "patriots administering Hong Kong," improving the governance efficacy of the HKSAR, and safeguarding the right to vote and the right to stand for election of permanent residents of the HKSAR.

Second, it establishes the core elements for conducting elections of the Election Committee, the Chief Executive, and the LegCo. The thrust of these elements is to restructure the Election Committee and add new functions to it. This will expand and ensure the balanced and orderly political participation of various sectors of Hong Kong society, make the Election Committee more suited to Hong Kong's realities, more broadly representative, and better meet the overall interests of Hong Kong society. The composition of the Election Committee will be expanded from four to five sectors, and its membership will be increased from 1,200 to 1,500. The Election Committee shall continue to elect the Chief Executive designate, and the Chief Executive shall be appointed by the Central People's Government. In addition, the Election Committee shall elect a fairly large proportion of the members of the LegCo, and nominate candidates for LegCo members.

Third, it establishes a committee for reviewing the qualification of election candidates in the HKSAR, which will be responsible for reviewing and confirming the qualification of candidates in the elections of the Election Committee, the Chief Executive and the Legislative Council. This is an important institutional arrangement to ensure "patriots administering Hong Kong."

Fourth, it authorizes the NPC Standing Committee to amend Annex I and Annex II to the Basic Law of Hong Kong. The two annexes, namely, Method for the Selection of the Chief Executive and Method for the Formation of the Legislative Council and Its Voting Procedures, list specific matters to be handled regarding the election of the Chief Executive and the Legislative Council. 

In addition, the NPC decision requires the HKSAR to amend relevant local laws, and organize election activities accordingly. It also requires the chief executive of the HKSAR to submit in a timely manner reports to the Central People's Government on important situations related to elections. These is the main content of the decision.

The NPC decision is solidly based on the Constitution. The constitutional basis of the NPC decision lies in the following three aspects:

First, the Constitution of the People's Republic of China covers the HKSAR. The Constitution is the fundamental law of the State. It has supreme and universal legal authority within the territory of the People's Republic of China. With its return to the motherland, Hong Kong is now again an integral part of China's governance system. In terms of legal status, the HKSAR is a local administrative region directly under the Central People's Government. The central authorities exercise overall jurisdiction over Hong Kong in accordance with the Constitution and other relevant laws.

Second, the principle of "one country, two systems," by definition, has well-laid out purposes. The fundamental purpose of this principle was set on the very day of its formulation, which is to safeguard China's unification and territorial integrity and sustain Hong Kong's prosperity and stability. "One country" is the prerequisite and basis of "two systems."

Third, the system of special administrative region established by the Basic Law is based on underlying principles and prerequisites. The Basic Law of the HKSAR adopted by the NPC in 1990 was formulated in accordance with the Constitution, which gives legal status to the policy of "one country, two systems." The Basic Law has comprehensive provisions on the operation of various institutions to be set up in the HKSAR. In establishing these institutions, the Basic Law observed two underlying principles: First, Hong Kong would be administered by Hong Kong people with patriots as the main body. Second, Hong Kong would enjoy a high degree of autonomy authorized by the central authorities. These two principles are embodied in the specific provisions of the 160 articles in the Basic Law.

To summarize, under the principle of "one country, two systems," the Constitution and the Basic Law jointly form the constitutional basis of the HKSAR. All the mechanisms and institutions of the HKSAR are built on this constitutional basis, and must meet the requirements of this constitutional basis in all their operations. Should there be failure to meet such requirements or violation and even sabotage of the constitutional basis, the relevant mechanisms and institutions must be revised and improved.

The NPC decision is solidly based on law. As we know, China exercises the system of people's congresses, and the National People's Congress is the highest state organ of power, which has and exercises the power of sovereignty. It is stipulated in China's Constitution that the NPC has the power of deciding on the establishment of special administrative regions and the systems to be instituted there. The electoral system of the HKSAR, which is at the core of its political system, is decided by the central authorities. Over the past few years, those who oppose China and destabilize Hong Kong have used the loopholes and deficiencies in the existing electoral system, and their acts have undermined not only China's sovereignty, security and development interests, but also the constitutional order and effective governance of Hong Kong. Therefore, necessary measures must be taken to revise and improve relevant systems and institutions. This is within the powers of the NPC. What is more, it is a responsibility the NPC must fulfill. 

Last but not least, I want to stress that the NPC decision has indisputable legal binding force. Next, the NPC Standing Committee will amend Annex I and Annex II to the Basic Law, and the HKSAR shall make amendments to relevant local laws. In doing so, they must act in strict compliance with the NPC decision and implement it in both letter and spirit. Thank you.

Chen Wenjun: 

Thank you, Mr. Zhang Yong. The floor is now open for questions. Please identify your news outlet before asking your question.

CCTV:

The central authorities started rolling out a series of measures last year, including the formulation and implementation of the Law on Safeguarding National Security in the Hong Kong Special Administrative Region. During the "two sessions" over the last few days, the NPC adopted the decision on improving the electoral system of the HKSAR. What is the impact of such a decision on the implementation of "one country, two systems"? Going forward, what other systems does the central authorities plan to improve? Thank you. 

Zhang Xiaoming:

I'll take this question. The NPC and its Standing Committee have adopted decisions or formulated the law regarding Hong Kong five times since last May, including the decision of the NPC on establishing and improving the legal system and enforcement mechanisms for the HKSAR to safeguard national security, adopted on May 28, 2020; the law on safeguarding national security in the HKSAR, adopted by the NPC Standing Committee on June 30, 2020; the decision of the NPC Standing Committee for the sixth Legislative Council of the HKSAR to continue to discharge duties, made on Aug. 11, 2020; the decision of the NPC Standing Committee issues relating to the qualifications for members of the Legislative Council of the HKSAR, on Nov. 11, 2020; and the decision on improving the electoral system of the HKSAR which was adopted yesterday (March 11, 2021). All these decisions and legislation — which have been adopted in a short period of time — are precise, effective and highly timely. On behalf of Mr. Xia Baolong and the relevant departments responsible for Hong Kong and Macao affairs, I would like to express our high respect and sincere gratitude to all the members of the NPC Standing Committee and every NPC deputy.

Hong Kong has been troubled by two major institutional problems since its return. The first lies in the legislation of Article 23 of the Basic Law, and the other concerns the development of Hong Kong's political structure. The former problem led to the absence of a law in Hong Kong safeguarding national security, and the latter problem intensified political turmoil in Hong Kong. Thanks to the formulation and implementation of the law on safeguarding national security in Hong Kong, the first problem has been resolved. The NPC and its Standing Committee's amendments to the relevant laws this time and in the future are for the sake of the second problem. In fact, they concern political stability and the security of political power. Both of the two measures will work together to jointly lay a solid institutional foundation for the implementation of "one country, two systems" in a comprehensive and accurate manner, which will ensure the steady implementation of the principle in the long run, and usher in new progress of Hong Kong.

Regarding possible new institutional reforms that the central authorities may adopt, as I mentioned previously, the fourth plenary session of the 19th CPC Central Committee has explained explicitly in relevant resolutions in this regard. It has made the overall plan on upholding and improving the system and institutions of "one country, two systems," especially those systems and institutions to be improved in relation to the implementation of the Basic Law of the HKSAR. Moreover, we will also improve political, economic, cultural, educational and social systems and institutions. All these institutional reforms will definitely be advanced in light of the "one country, two systems" principle and within the framework of the Basic Law. Joint efforts from the HKSAR government and people from all walks of life in Hong Kong are needed to address the problems and make rectifications to restore order in certain areas, such as education. Thank you. 

ITAR-TASS: 

My question is also about reform. This reform implements the principle of "patriots governing Hong Kong." Can you give any details [about] who will serve as the judge? Who will make decisions concerning politicians and officials [with regards] to patriotism feelings? Will the moderate opposition be able to be elected to the Legislation Council after the reform? Don't you think that this principle of patriotism will leave some part of Hong Kong society unrepresented in the Legislation Council, and possibly lead to further political crisis? Thank you. 

Zhang Xiaoming:

I'm glad to answer your question. This is indeed a question of great concern in Hong Kong society. Comrade Deng Xiaoping once elaborated on the criteria that patriots must meet. He said: "What is a patriot? A patriot is one who respects the Chinese nation, sincerely supports the motherland's resumption of sovereignty over Hong Kong and wishes not to impair Hong Kong's prosperity and stability." These three sets of criteria still stand in judging whether a person is patriotic or not. Of course, at the time when Deng made his remarks, Hong Kong had not returned to the motherland, had not been included in the national governance system, and had not seen chaos like the illegal "Occupy Central" movement and the turbulence over the amendment bill. At that time, there could not be a "negative list." At a recent symposium, Mr. Xia Baolong said that patriots must uphold the nation's sovereignty, security and development interests, respect and uphold the fundamental system of the country and the constitutional order of the HKSAR, and do their best to safeguard Hong Kong's prosperity and stability. Xia also clearly pointed out that those who advocate "Hong Kong independence," those who apply the "burn with us" tactic, and those who defy the nation's fundamental system, are not patriots. Xia's views align with Deng's definition of patriots. What's more, Xia's elaboration was a practical response to the new situations, new problems and new challenges arising from the implementation of the "one country, two systems" principle after Hong Kong's return to the motherland. The aim of improving the electoral system of the HKSAR is to provide a legal and institutional safeguard for fully implementing the principle of "patriots administering Hong Kong." We will by no means allow unpatriotic people, especially those anti-China disruptors in Hong Kong, to participate in the governance of the HKSAR. We will never allow those anti-China disruptors in Hong Kong to continue to have a seat in the hall of LegCo. Not even one. This is self-evident.

I must make it clear that the central authorities' emphasis on "patriots administering Hong Kong" is not meant to erase all differences in Hong Kong. Here, two lines of demarcation have to be drawn. First, the fact that unpatriotic people are not allowed to find their way into the HKSAR's power structure or governance system does not mean that they are not allowed to work and live in Hong Kong. They are just not allowed to participate in its governance. Second, the fact that unpatriotic people, especially those anti-China disruptors in Hong Kong, are excluded from the HKSAR's governance system does not mean that opposition members or the pan-democracy camp will all be excluded. We cannot simply equate the opposition members, especially the pan-democracy camp, with the anti-China disruptors in Hong Kong. There are patriots among the opposition members, especially among the pan-democracy camp, and those patriots still have the right to stand for election and be elected in accordance with the law. I would like to assure the reporter from TASS that LegCo in the future will be more broadly representative, and you will hear different voices in LegCo, including criticism of the government. What is different is, you may never see those legislators who make an ugly show of themselves, or willfully filibuster, or even get into fist fights. That is the difference. Thank you.

Lianhe Zaobao: 

We have seen that the NPC has decided to improve the electoral system of Hong Kong in the form of "decision plus amendments." Is there a specific timetable for this work? What is the deadline for amending the laws? Considering this, is the 2021 Hong Kong LegCo election still going to be held in September? Will the improved electoral system be applied by then? Thank you.

Zhang Yong: 

Thank you for your questions. Article 9 of the decision clearly stipulates that it shall enter into effect as of the date of promulgation. Authorized by the decision, the NPC Standing Committee will amend Annex I and Annex II to the Basic Law as soon as possible. Then, in accordance with the decision and the Basic Law's Annex I and Annex II amended by the NPC Standing Committee, the HKSAR will amend relevant local laws on elections as soon as possible. Only in this way can election activities in Hong Kong be conducted smoothly in accordance with the law.

As for when the next LegCo election will be held, the NPC Standing Committee decided on Aug. 11 last year that the sixth (incumbent) LegCo will continue to perform its duties for no less than one year, until the term of the seventh LegCo begins. According to the decision, the HKSAR can decide on its own when the next LegCo election will be held based on the HKSAR's actual situation, the amended Annex I and Annex II, and relevant local laws. Thank you.

Sing Tao Daily:

The NPC deliberated and adopted the decision on improving the electoral system of the HKSAR, giving more power to the HKSAR's Election Committee, including electing the chief executive designate and a relatively large proportion of LegCo members. Some people have considered this to be a "leap backwards for democracy." Is this inconsistent with "the principle of gradual and orderly progress" as stipulated in the Basic Law? Thank you.

Deng Zhonghua:

Thank you for your question. The Election Committee set out in the NPC's decision is a new institutional framework. As Mr. Zhang Xiaoming and Mr. Zhang Yong introduced just now, it will be responsible for nominating candidates for the chief executive and electing the chief executive designate, and electing a relatively large proportion of LegCo members, as well as nominating candidates for all LegCo members. That is the fundamental system of the Election Committee. Our two major considerations are as follows:

First, the Election Committee shall be composed of representatives from different sectors and strata of Hong Kong society, and is broadly representative. Electing part of the members of the LegCo and nominating candidates for LegCo members through such an Election Committee helps go beyond the interests of one certain sector, region or group, and makes up for the underrepresentation of functional and geographical constituencies under the current system. This way, LegCo can better represent the overall interests of Hong Kong society.

Second, the Election Committee shall be responsible for electing the chief executive designate and part of the LegCo members. This way, the chief executive and LegCo will share certain common voters, which will facilitate communication between them, and help consolidate the executive-led system stipulated in the Basic Law. In fact, the practice of the Election Committee electing some members of LegCo existed in the past. The HKSAR people are quite familiar with it. It cannot be said that restoring conventional practice is a "leap backwards," or that it is not "gradual and orderly progress" of the HKSAR's democratic system. "Gradual and orderly progress" does not mean a higher amount of direct elections in every single election. The method and system are good so long as they move toward expanded democracy in general, and better safeguarding the overall and fundamental interests of the HKSAR society as well as the democratic rights and fundamental wellbeing of the HKSAR residents. Thank you.

China Review News Agency:

The NPC decided to establish a candidate qualification review committee of the HKSAR. What significance does this have in ensuring the nomination of "patriots"? Does it conflict with the rights of HKSAR residents guaranteed by the Basic Law to exclude certain residents from standing for elections based on their political stance? Thank you.

Deng Zhonghua:

The candidate qualification review committee of the HKSAR will be established to vet and confirm the qualifications of candidates for members of the Election Committee, chief executive and LegCo members. It is an important system for implementing "patriots administering Hong Kong." It aims to rule out anti-China, destabilizing forces from the HKSAR's governance structure. It aims very clearly to exclude them and ensure that the chief executive, LegCo members, and the Election Committee members are all true patriots, and that the power to administer the HKSAR is firmly in the hands of patriots.

The establishment of the qualification review mechanism ensures that candidates' qualifications conform with the Basic Law, relevant laws, interpretations, decisions and local laws of the HKSAR. This is an entirely different matter from safeguarding the rights of the HKSAR residents as stipulated by the Basic Law, including the right for HKSAR permanent residents to vote and stand for election. The two do not contradict one another at all. Essentially, the qualification review mechanism provides an institutional guarantee for the principle of "patriots administering Hong Kong," ensuring the sound and sustained implementation of the "one country, two systems" principle in the HKSAR. It is a basic premise for HKSAR residents exercising the right to vote and the right to stand for election.

Just think what Hong Kong would be like if those who oppose China and destabilize Hong Kong occupied core positions of the HKSAR's body of political power? The turbulence over the amendment bill in 2019 cannot ever be allowed to happen again. Thank you. 

Hong Kong Ta Kung Wen Wei Media Group:

The Clause 7 of Annex I and Clause 3 of Annex II to the Basic Law, as well as NPC Standing Committee's relevant interpretations in 2004, stipulated a "five-step" procedure for amending the methods for the selection the Chief Executive and the formation of the LegCo. Why did the central authorities still adopt "decision plus amendments" approach, instead of authorizing the HKSAR to amend them in accordance with the "five-step" procedure? Thank you.

Zhang Yong: 

Thank you for your question. Amending and improving the electoral system of the HKSAR through the form of "decision plus amendments" is an important decision we made after repeatedly studying and carefully weighing various factors. Mr. Zhang just clarified its imperative and significance during his opening remarks. Here I would like to add one more point. 

The chaos in Hong Kong society in recent years has clearly exposed the institutional loopholes and deficiencies in Annex I and Annex II of the Basic Law. These can be demonstrated in two aspects. First, those who oppose China and destabilize Hong Kong have made use of the institutional loopholes in the electoral system to enter the political structure, brazenly engaging in activities that undermine not only the nation's sovereignty, security and development interests, but also the prosperity and stability of Hong Kong. Second, those who oppose China and destabilize Hong Kong have taken advantage of the institutional deficiencies in procedures, deliberately destroying the constitutional order and effective governance of Hong Kong and obstructing its democratic development.

We all know that as early as in 2007, the NPC Standing Committee made a decision which clearly stipulated that the fifth chief executive could be selected through general election in 2017. In August 2014, the NPC Standing Committee further stipulated the roadmap and timetable for selecting the HKSAR's chief executive and forming LegCo through general elections. Unfortunately, those who oppose China and destabilize Hong Kong made use of the "five-step" procedure to veto the proposal for electing the chief executive. As a result, the aim of selecting the chief executive and forming LegCo through general elections was hence far beyond reach. If the institutional loopholes enabling anti-China disruptors in Hong Kong to enter the body of political power were not fundamentally plugged, the "five-step" procedure you mentioned would exist only in name and lead nowhere. Through the "decision plus amendments," the NPC and its Standing Committee, at the state level, exercised its constitutional power to establish a democratic electoral system with Hong Kong characteristics that suits the actual conditions of Hong Kong. This is an effort to reform from the bottom to ensure "patriots administering Hong Kong," to restore constitutional order, and to improve governance efficiency, laying a solid institutional foundation for the sound and sustained implementation of "one country, two systems." Thank you.

Hong Kong Economic Times:

The question of whether the general election goals stipulated in Article 45 and Article 68 of the Basic Law would be changed along with the reform of the electoral system has drawn much attention. What is the central authorities' interpretation of general elections? Thank you.

Zhang Xiaoming:

As I just said, the NPC's revision of the electoral system of the HKSAR is a "small incision," and not a single character or punctuation mark in Article 45 or Article 68 of the Basic Law has been changed. Therefore, the goals of selecting the HKSAR's chief executive and LegCo members through general elections will not be changed.

The central government has always firmly supported the HKSAR in gradually developing a democratic system suited to the HKSAR's realities. Just now, as Mr. Zhang Yong also mentioned, the NPC Standing Committee adopted a decision on Aug. 31, 2014, which clarified that election of the Chief Executive of the HKSAR in the year 2017 could be implemented by the method of universal suffrage. After realizing universal suffrage of the chief executive, the selection of all members of the Legislative Council by universal suffrage could also be realized in 2020. However, it was the opposition in Hong Kong that stymied the decision in every possible way. The opposition proposed "civil nomination" that completely violated the nomination mechanism clearly stated in Article 45 of the Basic Law, and advocated that anyone in Hong Kong can nominate a candidate for the position of the Chief Executive. I remember I had a public debate with the then-chairman of the Civic Party when I was in Hong Kong. Hong Kong could have achieved universal suffrage for the selection of the Chief Executive in 2017, but it was not achieved in the end. Who should bear this responsibility? Who is blocking the pace of democracy in Hong Kong and preventing the implementation of universal suffrage? I think justice is in the hearts of the people, and everyone knows it in their hearts.

You mentioned the implications of the universal suffrage system or the implications of universal suffrage. I think this should be understood strictly in accordance with the relevant provisions of the Basic Law. Universal suffrage naturally includes the implications of universal and equal elections. As for the specific arrangements for the universal suffrage system, they should be based on the "one country, two systems" principle, proceeding from the realities in Hong Kong, and stipulated in accordance with the Hong Kong Basic Law and the relevant decisions of the NPC Standing Committee. Thank you.

CGTN:

After the NPC passed its decision on improving the HKSAR's electoral system, a U.S. State Department spokesperson condemned the move as an attack on the democratic process in Hong Kong. What are your comments on this? In addition, if the United States and other Western countries impose so-called sanctions on China and the HKSAR, how will China respond? Thank you.

Zhang Xiaoming:

First of all, I want to say that the design and improvement of the electoral system of the HKSAR are purely China's internal affairs that allow no carping comments from any foreign country. As far as I know, the United States itself has very strict laws and regulations to prevent foreign interference in its elections, including the recent passage of an election reform bill by the House of Representatives of the U.S. Congress. Naturally, we have to ask, why can the United States amend its election laws whenever it deems necessary, yet be so interested in and neurotic about law amendments in a special administrative region of China and strike such a meddlesome posture. Speaking of the matter, it reminds us of some scenes. During Hong Kong's turbulence over the proposed amendment bill in 2019, when rioters carried out such violent acts as beatings, smashing property and setting fires on the streets, and even attacked the Legislative Council, American politicians felt a sense of gloating and praised it as "a beautiful sight to behold." By the time American protesters stormed the Capitol Hill on Jan. 6, they quickly defined it as domestic terrorism. Isn't this typical and blatant double standards? So, I do not understand, and I don't know, when there was so much chaos surrounding the U.S. presidential election last year, and after the violent attacks on the Capitol Hill on Jan. 6, what moral basis do American politicians still have in criticizing the electoral system of the HKSAR of China?

We also noticed that at the 46th session of the U.N. Human Rights Council, 70 countries signed a joint statement urging relevant sides to stop interfering in China's internal affairs, including those concerning Hong Kong. This fully shows that hegemony is repugnant. As for the "big stick" of sanctions frequently wielded by the United States, I think it has long been despised. Our colleagues in the Hong Kong and Macao Affairs Office, including Mr. Xia Baolong, Mr. Deng Zhonghua and myself here today, were all included on the so-called sanction list by the U.S. government last year. We are deeply honored by this. Of course, we have always adhered to the principle of "it is impolite not to reciprocate" for such sanctions, and they will definitely remember our countermeasures. That's all I have to say. Thank you.

China News Service:

Just now, Mr. Zhang Yong said that the NPC decision has a legal basis. My question is, what is the legal basis of the NPC in authorizing the NPC Standing Committee to amend Annex I and Annex II to the Basic Law of Hong Kong? Thank you.

Zhang Yong:

Thank you for your question. As I said in my opening remarks, it is stipulated in China's Constitution that the NPC has the power to make decisions regarding the establishment of special administrative regions and the systems instituted there. The NPC is China's highest state organ of power. It has been stated clearly that the NPC decision establishes the requisite core elements for the electoral system of Hong Kong and has solid constitutional and sufficient legal basis. In fact, both before and after Hong Kong's return to the motherland, the NPC made multiple major decisions on the question of Hong Kong. I would like to give some additional information regarding your question. The Method for the Selection of the Chief Executive of the HKSAR and the Method for the Formation of the Legislative Council of the HKSAR are two annexes to the Basic Law. The fact that they are not included in the main clauses of the Basic Law was the result of special considerations during the drafting process of the Basic Law decades ago. As these specific items may need adjustments as the situation changes, it is more flexible for them to appear in the form of annexes to make it more convenient to make amendments if necessary. In fact, the two annexes were amended in 2010 and approved by the NPC Standing Committee. According to Clause 22 of Article 67 in China's Constitution, the NPC Standing Committee shall exercise the functions and powers accorded to it by the NPC. Therefore, the NPC authorizing its Standing Committee to amend Annex I and Annex II is in line with the original intent in drafting the Basic Law, and has sufficient legal basis. I hope my answer is helpful. Thank you.

China Daily:

Could you explain how the NPC made the decision? Does the legislation process take into account the opinions of Hong Kong residents? What are the next procedures for the NPC Standing Committee in amending the Annexes? And, will the opinions of the Hong Kong people be included in this process? Thank you.

Zhang Yong:

Thank you for your questions. The drafting of the NPC decision drew on suggestions and advice from people of various circles. Relevant departments of the central authorities and legal experts established a special work force who made extensive studies and investigations in the drafting of the decision. During the process, they solicited views multiple times from the chief executive of the HKSAR, major government officials, leading members of the Hong Kong legislature, and representatives of various circles in Hong Kong. When the epidemic situation was still very serious, related departments organized webinars with representatives from Beijing, Hong Kong, Macao and Shenzhen, while officials from relevant departments went to Shenzhen to hold multiple seminars, in order to listen to opinions and suggestions from representatives of various circles. We would like to thank friends from the media in Hong Kong, Macao and the Chinese mainland who extensively covered and initiated lively discussions on this topic. We have been following your reports. Your reports also fully reflected the voices of people from different walks of life. During the fourth session of the 13th NPC several days ago, nearly 3,000 deputies conducted thorough deliberations on the draft version of the decision and proposed many suggestions for its further improvement. The NPC and related departments attached great importance to those suggestions and fully absorbed them after careful research and studies. Next, under the authorization of the NPC, the NPC Standing Committee will strictly follow legal procedures in amending Annex I and Annex II. It will also continue to solicit views from various circles, and increase communication and coordination with relevant parties. I believe this work will begin very soon. Thank you.

Phoenix TV:

My question is about the composition of the Election Committee. Why should Hong Kong deputies to the NPC, Hong Kong members of the CPPCC National Committee and representatives of Hong Kong members of related national organizations be added as the fifth sector in the Election Committee? What are the considerations of the central government? Thank you.

Deng Zhonghua:

As we all know, under Hong Kong's current electoral system, Hong Kong deputies to the NPC are ex-officio members of the Election Committee, and some Hong Kong members of the CPPCC National Committee are also members of the Election Committee. Under the new electoral system, Hong Kong deputies to the NPC will continue to be ex-officio members, and all HKSAR permanent residents among the members of the CPPCC National Committee will become members of the Election Committee. That is to say, the Hong Kong members of the CPPCC National Committee will also be ex-officio members of the Election Committee. In addition, we have included the "representatives of Hong Kong members of related national organizations," because we think that as these Hong Kongers participate in activities of national organizations, they have a better understanding of state affairs. Generally speaking, the members in the fifth sector have a strong sense of the nation. Their appointment as members of the Election Committee can help strengthen national elements in the Committee and integrate the defending of national interests with the interests of Hong Kong. Thank you.

Kyodo News:

My question is about economy. Some people from the economic community are concerned that the reform of the electoral system will cause Hong Kong to lose its status as an international financial center, and that foreign companies in Hong Kong will flee overseas. What is China's take on this? Thank you.

Zhang Xiaoming:

I'll take your question. But before I answer, I'd like to just remind you and other friends from the press of events from the past. In September 1983 when the Sino-British talks over the future of Hong Kong reached a deadlock, the British side, in order to achieve the goal of "trading sovereignty for administration," played the "economy card" to impose pressure on China, and started spreading messages such as "talks collapsing with the future of Hong Kong unclear" to the outside. As a result, on September 24, Hong Kong witnessed sharp devaluation of its currency and runs on banks, its residents started panic buying daily necessities, and it seemed like that was the end of Hong Kong, in an event which became known as "Black Saturday." In 1995, before Hong Kong's return to the motherland, the American Fortune magazine ran a cover story called "The Death of Hong Kong," predicting that it would be impossible for Hong Kong to remain an international trade and financial center after it returned to the motherland. After the enactment of the Law on Safeguarding National Security in the HKSAR last year, another American magazine, The Atlantic, published an article titled "The End of Hong Kong." There seems to be a rule that whenever the occasions are important and sensitive or whenever there are major events, some Westerners will be more enthusiastic in expressing pessimistic views about Hong Kong and spreading all kinds of alarmist "predictions." However, the facts always astound them.

You mentioned the confidence of foreign investors in Hong Kong. Since the enactment of the Law on Safeguarding National Security in the HKSAR, I've observed that both foreign and local Hong Kong investors have more, instead of less, confidence in Hong Kong. Let me provide you with some figures as an example. The capital flowing into Hong Kong last year reached US$50 billion, the balance of Hong Kong's banking system repeatedly set new all-time highs, and the funds raised through initial public offerings (IPOs) in its stock exchange ranked second in the world last year. The stock market is a barometer of Hong Kong's economy and an important indicator in assessing the confidence of investors. The market capitalization of Hong Kong's stock market hit a record of HK$50 trillion this January. Even a survey published by the American Chamber of Commerce in Hong Kong showed the percentage of enterprises optimistic about the business environment in Hong Kong increased sharply in January compared with August last year.

I also want to point out that the reason Hong Kong obtained its special economic status, including as an international financial center, international trade center and international shipping center — especially the international financial center — is attributed to many reasons, including a complete legal system, an abundance of professionals, a highly free and open market, and linguistic advantages. Another important factor is the driving force brought by the Chinese mainland's sustained and rapid development to Hong Kong. Such advantages are not available elsewhere and are difficult to replicate. Therefore, we have every reason to believe that following the implementation of the Law on Safeguarding National Security in the HKSAR and the improvement of the electoral system, Hong Kong's political, economic, social and business environments will be further improved, and Hong Kong's status as an international financial center will be further consolidated. That's all for my answer. Thank you.

Chen Wenjun:

Today's press conference is hereby concluded. Thank you all.

Translated and edited by Zhang Liying, Chen Xia, Wang Yiming, Zhou Jing, Zhu Bochen, Duan Yaying, Huang Shan, Gong Yingchun, Zhang Rui, Liu Qiang, Wang Qian, Zhang Jiaqi, Yang Xi, Fan Junmei, Li Huiru, He Shan, Guo Yiming, Xu Xiaoxuan, and David Ball. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Ning Jizhe, deputy head of the National Development and Reform Commission (NDRC)

Hu Zucai, deputy head of the NDRC

Zhao Chenxin, secretary general of the NDRC

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson.

Date:

March 8, 2021

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today we are celebrating International Women's Day. We would like to extend our greetings to all women and wish you a happy holiday. Today, we are joined by three members of the Leading Party Members Group of the National Development and Reform Commission (NDRC). They are Mr. Ning Jizhe, deputy head of the NDRC; Mr. Hu Zucai, deputy head of the NDRC; and Mr. Zhao Chenxin, secretary general of the NDRC. As we know, works on reform and development are of crucial importance in implementing the new development philosophy, carrying out the guiding principles of the fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC), and ensuring a good start of the 14th Five-Year Plan (2021-2025). Today, three NDRC officials will elaborate on the issue and take your questions. Now, let's give the floor to Mr. Ning Jizhe.

Ning Jizhe:

Ladies and gentlemen, friends from the media, good morning. On March 5, He Lifeng, head of the NDRC, did an interview and answered several questions that the media are most concerned about. Today, Mr. Hu, Mr. Zhao and I are happy to meet our friends from the media and take your questions. As today celebrates the International Women's Day, I would like to first extend our greetings to all women. I also want to thank our friends from the media for your attention, understanding, support, and help for our reform and development work.

Since last year, in face of a complicated and challenging international situation and formidable tasks in promoting reform, development and stability at home, especially with the severe impact of the COVID-19 pandemic, all regions and departments have been working under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, coordinating epidemic prevention and control with social and economic development, and making efforts to ensure stability on six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and maintain security in six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations). China's economy saw improvements quarter by quarter and has been recovered in a stable manner. The major annual tasks of economic and social development have been completed in a satisfactory way. Meanwhile we attained a complete victory in the fight against poverty and scored decisive achievements in securing a full victory in building a moderately prosperous society in all respects.

Over the past few days, the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development and the draft report on national economic and social development plan for 2021 have been delivered to the "two sessions" for deliberation. The draft report summarizes the implementation of last year's plan on national economic and social development, and further puts forward main targets, policy directions, and specific tasks for economic and social development in 2021. The draft report will be delivered to the National People's Congress (NPC) for deliberation and to the National Committee of the Chinese People's Consultative Conference (CPPCC) for discussion. Once approved by the NPC, the report will serve as an important foundation for us to carry out our work concerning economic and social development.

The year 2021 has been a rather significant year in China's modernization. It marks the start of the 14th Five-Year Plan and the embarkment of a new journey to build China into a modern socialist country in all respects. Thus, works on reforming and development are very important. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and in accordance with the requirements of the Report on the Work of the Government delivered by Premier Li Keqiang, we will act on the general principle of pursuing progress while ensuring stability, ground our efforts in the new development stage, apply the new development philosophy, and create a new pattern of development. We will work to pursue high-quality development, resolutely promote reform and advance opening-up. We will consolidate and expand the achievements of the COVID-19 response and economic and social development, ensuring better coordination in pursing development and upholding security. We will work to ensure stability on six key fronts and maintain security in six key areas, implement macro policies in a systemic and targeted way, and keep major economic indicators within an appropriate range, in a bid to ensure a good start of the 14th Five-Year Plan and commemorate the centenary of the CPC with outstanding achievements in development.

That's all for my introduction. Next, Mr. Hu will brief you on the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development.

Hu Zucai:

Friends from the media, good morning. Next, I will brief you on the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development.

The 14th Five-Year Plan period is the first five years after China has achieved the first centenary goal of establishing a moderately prosperous society in all respects and embarked on a new journey towards the second centenary goal of building China into a modern socialist country in all respects. The CPC Central Committee and the State Council have attached great importance on the formulation work of the 14th Five-Year Plan. The fifth plenary session of the 19th CPC Central Committee deliberated and adopted the Recommendations of the CPC Central Committee for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035 , and this has set the direction and provided the basic principles for the formulation work of the draft outline. General Secretary Xi Jinping has delivered important speeches and made important instructions many times on the formulation and publishing of the 14th Five-Year Plan outline. Premier Li Keqiang has also presided over many meetings to deploy the research efforts.

In accordance with the deployments made by the CPC Central Committee and the State Council, the NDRC has been working with relevant parties and effectively advanced the formulation work since 2019. After the conclusion of the fifth plenary session of the 19th CPC Central Committee, the NDRC has fully implemented the guiding principles of the recommendations of the CPC Central Committee, and finished the draft outline based on summarizing and evaluating the 13th Five-Year Plan. During the formulation process, the NDRC combined both target-oriented and problem-oriented approaches and integrated top-level designs by drawing on public opinion. The NDRC organized research on more than 200 major issues, listened to both experts' opinions and those from all regions and government departments, and collected measures and suggestions from all sectors of the society. This means the draft outline fully represents the aspirations of the society, the wisdom of the public, the opinions of experts, and the experiences of those at the grassroots level.

The draft outline follows the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, specifies and quantifies major targets and key tasks of economic and social development during the 14th Five-Year Plan period, and draws a blueprint of China's embarkment on a new journey to build itself into a modern socialist country in all respects. It is a common action plan for Chinese people of all ethnic groups. The draft outline has 19 parts, 65 chapters, and 192 sections, with approximately 74,000 Chinese characters. It consists of three parts. The first part elaborates on the development environment, guiding principles, and main targets. The second part contains strategic tasks and measures from 17 aspects. The third part is about guaranteeing the implementation of the outline. In general, the draft outline has four highlights.

First, the draft outline represents the core value of the three new fronts. The draft outline was formulated by analyzing China's new development stage of building itself into a modern socialist country in all respects. It applies the new development philosophy in a complete, precise, and comprehensive manner. It also reflects China's accelerated pace in creating a new pattern of development with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. It demonstrates China's efforts in promoting high-quality development. The draft outline shows the full understanding and the systemic implementation of the requirements of the three new fronts.

Second, the draft outline has made special efforts to ensure the dovetail of the two centenary goals. The draft outline compiles long-range objectives through the year 2035, focuses on the current tasks of the 14th Five-Year Plan period, and centers on the requirements of making new breakthroughs on six fronts. It has set 20 major targets in five categories including the economy, innovation-driven development, public welfare, green ecology, and security. It not only pays attention to the implementation of the new development philosophy and fully correlates with a set of indicators of high-quality development, but also fully reflects the people-centered development philosophy and works to bring a greater sense of gain to the public. The targets are set in a scientific and reasonable manner, so that they can be both encouraging and practical; meanwhile there is room left to deal with uncertainties.

Third, the draft outline highlights the requirements of ensuring coordination in pursing development and upholding security. It remains mindful of worst-case scenarios and coordinates between development and security. For the first time, the draft outline has set a section for safe development, which sets specific arrangements for improving the national security system and capacity-building, and guaranteeing the security of food, energy, resources, finance, and more. 

Fourth, the draft outline highlights support towards the implementation of major strategic tasks. In accordance with the needs of the nation and the expectations of the people, the draft outline has set 20 special sections and put forward 102 major projects. This has provided strong support for the implementation of the targets listed in the draft outline. 

The draft outline is currently under deliberation at the fourth session of the 13th National People's Congress (NPC). The NDRC will proactively collect opinions from NPC deputies and CPPCC members, and quickly revise and improve the draft outline. As the blueprint has been drawn and the horn of inspiration blown, we are convinced that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with the hard work of Chinese people of all ethnic groups, there is no doubt that the blueprint will become reality, and new and big steps will be made in terms of China's economic and technological strength, national strength, and people's livelihood. Thank you.

Chen Wenjun:

Thank you, Mr. Ning and Mr. Hu, for your introduction. Now the floor is open for questions. Please identify your news outlets before asking questions.

CCTV:

This year, the macro economy still faces the risks of inbound Covid-19 cases and uncertainties of the external economy. How do you view these issues? What kind of policies and reform measures will be taken to support the economic recovery and ensure the realization of economic and social development targets this year? Thanks. 

Ning Jizhe:

This is a good question. First of all, it should be noted that China's economic performance during the first two months of 2021 has continued the trend of steady recovery seen since the second quarter of last year. Production indicators show that, during the first two months of this year, overall electricity generation and rail freight volume increased by 24.2% and 16.5% respectively. Demand indicators show that the combined sales of retail and catering enterprises increased 28.7% year-on-year during this year's Spring Festival holiday, and 4.9% from the 2019 Spring Festival holiday, which was before the Covid-19 outbreak. A total of 12.265-billion-yuan cinema tickets were sold this February, setting a global single-market box office record for a single month. After the Spring Festival, the rate of investment projects starting and resuming and construction companies starting work were higher than in previous years. Import and export figures were released yesterday. Total renminbi-denominated imports and exports from January to February up 32.2% year-on-year, with exports up 50.1%. In terms of economic outlook indicators, the manufacturing purchasing managers' index (PMI) and the non-manufacturing business activity index stood at 50.6% and 51.4% respectively in February, marking the 12th consecutive month the indexes were above the 50-point mark indicating economic expansion. This shows that the economy has maintained its expansionary trend.

In the meanwhile, like you said, to ensure continuous and stable economic recovery, China still faces risks and challenges. The Covid-19 epidemic is still spreading around the globe. The world economic situation is severe and complex, and the number of unstable and uncertain factors has increased. Also the foundation for domestic economic recovery is not yet solid. Consumption is still constrained, the growth of investment is not sustainable, and micro, small and medium-sized enterprises and self-employed individuals still face many difficulties. But we should view many of these domestic economic problems as problems existing only during the recovery period and can be resolved through development. As for the inbound risks you mentioned, we need to respond to them in an active and proper manner. We will counteract the uncertainties of the complex external environment by increasing internal certainty through active efforts. 

We all see that the draft report on development plan has made clear the major targets of social and economic development for 2021, such as a GDP growth of over 6%, over 11 million new urban jobs, a surveyed urban unemployment rate of around 5.5% and a CPI increase of around 3%. These targets are based on consideration of economic recovery, impacts of Covid-19 on the economic trajectory, and the balance and connection between different years. They are in line with the principles of range-based regulation and a prudent approach to development. We have the confidence that with the support of macro policies and the joint efforts of market entities, we will achieve the social and economic development targets this year. I will highlight policies and measures in the following six aspects:

First, we will work to ensure that macro policies provide necessary support to the economy. To promote steady, healthy and sustainable economic development, we must ensure continuity, stability and sustainability of macro policies. We should avoid a sudden turn in policies and adjust and improve policies as situations change in a timely fashion. We will continue to pursue a proactive fiscal policy. In 2021, we will arrange more than 25 trillion yuan in expenditure in the general public budget, up by 1.8% over the previous year. We will raise the general transfer payments from central to local governments by 7.8%, and increase transfer payments for equalizing access to basic public services by over 10%. We will continue to pursue a prudent monetary policy and enable the increases in money supply and aggregate financing to be generally in step with the nominal GDP growth. This year, we may see a relatively higher nominal GDP growth, which requires us to maintain reasonable and ample liquidity. We will continue to implement the employment-first policy. This year, the target for new urban jobs is two million more than that of last year. For companies that do not cut jobs or only cut a small number of jobs, we will continue to provide adequate fiscal and financial policy support and lower premiums for unemployment insurance and work injury compensation insurance.  

Second, we will continue to implement preferential policies for enterprises to address their problems. Enterprises are the source of economic growth. Ensuring the stability of the 140 million market entities means that we can keep the fundamentals of the economy stable. Regarding tax-cuts, we will continue to implement systematic tax-cut policies, extend the duration of several temporary policies, and adopt new structural tax reduction measures. Regarding financial policies, we will continue the policy of allowing micro and small businesses to defer principal and interest repayments on inclusive loans and channel more bank funds to micro and small businesses and self-employed individuals. Inclusive loans to micro and small businesses by large commercial banks will increase by over 30%. We will provide targeted support to enterprises and industries enduring a protracted hit from Covid-19. We will continue to guide the financial sector to give more to the real economy. To reduce costs, electricity rates for general industrial and commercial businesses will be further reduced. Average rates for broadband and dedicated internet access services for small and medium-sized enterprises will be lowered by another 10%. The port development fee will be abolished. Airlines' contributions to the civil aviation development fund will be cut by 20%. Governments in localities that were hit hard by Covid-19 will be encouraged to lower or waive rentals on state-owned property for micro and small businesses and self-employed individuals in the service sector.

Third, we will make good use of reform policies. Reform is both a driving force and an integral part of the macro policy. Achieving steady growth must rely more on reform and innovation as the fundamental driving force. Reform policies should aim to energize market entities. We will uphold the "two no irresolutions" principle (no irresolution about consolidating and developing the public sector and no irresolution about encouraging, supporting, and guiding non-public sector development). We will implement the action plan for building a high-standard market system, and deepen reforms to streamline administration and delegate power, improve regulation, and upgrade services. We will also deepen the reforms of enterprises, fiscal, taxation, financial and price systems. Opening-up policies should be more supportive to keep the fundamentals of foreign trade and investment stable and ensure the stability of trade volume and market entities. We will stabilize the volume and improve the quality of imports and exports and maintain a basic equilibrium in the balance of payments. We will further the development of pilot free trade zones, the Hainan Free Trade Port and other highlands for opening up. We will leverage the massive domestic market to promote international cooperation and promote a positive interplay between the domestic circulation and international circulation. 

Fourth, we will make clear the directions for sci-tech development and industrial policies. Science and technology are the driving force of development, and industry is the vital foundation for development. We will strengthen scientific and technological self-reliance, vigorously enhance scientific and technological innovation capabilities, significantly increase spending in basic research, and effectively achieve breakthroughs in core technologies in key areas. Meanwhile, we will further strengthen international cooperation in the field of science and technology. We will advance the supply-side structural reform and make full efforts to revitalize and promote the real economy, upgrade the industrial foundation and modernize industrial chains. A major campaign to develop advanced manufacturing industry clusters will be launched. The proportion of R&D expenses covered by the additional tax reduction policy will be raised to 100 percent for manufacturing enterprises. We will make a full refund of incremental VAT credits to advanced manufacturing enterprises on a monthly basis, and raise the proportion of loans to the manufacturing sector. We will implement a series of policies to promote high-quality development of the integrated circuit industry and the software industry in the new era. Pilot projects that integrate the advanced manufacturing industry and the modern service industry will be carried forward. 

Fifth, we will focus on demand-side regulation. To foster a new development paradigm, we must firmly expand domestic demand as a strategic priority, accelerate the cultivation of a complete domestic demand system, promote the coordinated development of domestic and external demand, and give full play to the fundamental, critical and supportive role of consumption, investment and exports on economic growth. I'd like to talk a little bit more about consumption. To expand consumption, we must stabilize and create more jobs and ensure steady increases in people's income. In the meanwhile, we must notice that per capita consumer spending dropped by 4% last year, lower than the real growth rate of 2.1% of per capita disposable income of Chinese residents. This was mainly due to reduced contacts and gatherings because of the epidemic. Therefore, to further tap consumption potential, we must maintain epidemic prevention and control measures on a continuing basis and promote consumption at the same time. We also need to expand the consumption of goods, including commodity consumption, service consumption, health consumption, information consumption, online consumption and green consumption. To promote auto consumption, we will carry out policies to encourage auto consumption in rural areas and auto trade-ins. We will guide local governments to ease purchase restrictions for new-energy vehicles and issue more license plates. These measures will spur auto consumption and lead to healthy and orderly development of new-energy vehicles. In 2020, the output of new-energy vehicles hit 1.456 million, up by 17.3% over the previous year. In regards to housing, we will increase the supply of government-subsidized rental housing and shared ownership housing to address the housing difficulties of the people, especially new urban residents and young people.

Sixth, we will push forward green, low-carbon and circular development. Strengthening protection of the environment is favorable for fostering new areas of high-quality development. To achieve peak carbon emissions and carbon neutrality is an opportunity to step up the upgrading of industry and energy structures. In 2020, the installed power generating capacity of renewable energy stood at 934 million kw and we will further increase it. While increasing the capacity, we will also address the problem of idle capacity and improve storage capacity to achieve coordinated and orderly development. We will promote the cultivation of energy-saving and environmental protection industries worth of trillions of yuan. The green transformation of major industries and areas will be carried forward. Thus, we will realize the targets of a drop of around 3% in energy consumption per unit of GDP and a continued reduction in the discharge of major pollutants.

The Cover:

The Central Economic Work Conference made it clear that China will accelerate the construction of major projects and strengthen the sustainability of investment growth in 2021. What specific measures will be taken to expand rational investment this year? What are the considerations and plans for supporting new infrastructure development? Thank you.

Ning Jizhe:

Last year, China became the only major economy to see positive growth, in which investment played a big role. In order to keep the economy operating within the proper range this year, we still need to give further play to the key role of investment, strengthen areas of weakness, create more investment opportunities, boost investment growth, and appropriately expand effective investment. Measures will be taken in the following five aspects: 

First, we will give play to the leading role of government investment. In 2021, 610 billion yuan will be earmarked for investment in the central government budget, an increase of 10 billion yuan from the previous year. It will be used to mobilize resources to deal with major, difficult, and urgent issues at the state level. We will actively support the renovation of old urban communities and construction in key sectors involving agriculture, rural areas, farmers, water conservancy, major infrastructure and national strategy, social undertakings, and ecological progress. Meanwhile, 3.65 trillion yuan of special local government bonds will be issued for transport, energy, agriculture, forestry, water conservancy, eco-environmental protection, social undertakings, logistics, municipal public utilities, industrial parks, and other infrastructure and public service projects that will yield a certain degree of revenue.

Second, we will give more play to the role of investment in strengthening areas of weakness and adjusting structures. Investment today will be the supply of tomorrow. We will accelerate efforts to strengthen weaknesses in such areas as infrastructure, municipal public utilities, agriculture and rural areas, public security, eco-environmental protection, public health, material reserves, disaster prevention and mitigation, as well as in ensuring people's wellbeing. We will expand investment in equipment upgrading and technological upgrading in the manufacturing sector. Last year, investment in high-tech industries grew 10.6% year on year, 7.7 percentage points higher than overall investment. This year, we will further strengthen macro guidance and coordinate industry layouts to focus on energy-efficient and environmentally-friendly sectors as well as new-generation information technology, biotechnology, and new energy. We will also increase investment in high-tech and strategic emerging industries.

Third, we will focus on new infrastructure, new urbanization initiatives, and major projects. In terms of new infrastructure, we will roll out the 14th Five-Year Plan for new infrastructure construction to boost the development of the digital economy, expand the application of 5G, as well as speed up the construction of industrial internet and data centers. As for new urbanization initiatives, we will launch an urban renewal campaign to advance the renovation of old urban communities in all aspects and promote urbanization mainly in county towns. Regarding major projects, we will expedite the progress of major projects on time, including the Sichuan-Tibet railway, the Xining-Chengdu railway, and the Dateng Gorge water conservancy project.

Fourth, we will boost the development of private investment. Last year, private investment maintained a good momentum in recovery. It registered a positive growth, accounting for 54.9% of the total investment and showing great potential. This year, we will take measures in the following three aspects: First, we will further mobilize the enthusiasm of private investment, continue to open up market access for private enterprises, support their innovative development, and encourage private capital to participate in the construction of new infrastructure, new urbanization initiatives, and major projects as well as projects to strengthen areas of weakness. Second, we will further strengthen the capacity of private investment, guide banks to increase credit support for private enterprises, and implement cost-cutting policies for micro, small, and medium-sized enterprises. Third, we will further explore new ways for private investment, extend the public-private partnership (PPP) model to more areas in a well-regulated way, and steadily carry out trials for real estate investment trust funds (REITs) in infrastructure projects to put existing infrastructure assets to good use.

Fifth, we will build up the number of projects in reserve and strengthen the guarantee of vital factors including funds. The work will focus on the following aspects: First, we will stay committed to the principle that projects are well-planned before investment. This year, we will make efforts to identify major construction tasks, plan and reserve a group of major projects which will strengthen the economic foundation, increase functions and promise long-term benefits, and accelerate the progress of preliminary work on those projects. Secondly, we will stay committed to the principle that funds follow projects. We will expedite the issuance of central budgetary investment plan and organize local governments to make high-quality preparations for projects funded by special bonds. Third, we will stay committed to the principle that production factors go with projects. We will enhance communication and coordination between departments and guarantee the land used for major national projects. Thank you.

China Daily:

We know that topics involving education, medical care, elderly care, and childcare are closely related to people's lives and thus are among their concerns. What new measures can be expected in this year's draft outline of the 14th Five-Year Plan to address public worries and concerns? Thank you. 

Hu Zucai:

The five-year plan is as much a matter of state as of every household. The draft outline follows the people-centered development philosophy; sets out the overarching goal of meeting the people's ever-growing needs for a better life; focuses on well-rounded human development and the improvement of people's lives; stresses to ensure that public services are inclusive, meet essential needs and ensure basic living standards for people in difficulty; steps up efforts to promote equal access to basic public services, and puts forward a series of development goals, indicators, policies, and measures to ensure that the fruits of development will benefit all the people more equitably and provide a higher-quality and higher-level of access to childcare, education, employment, medical services, elderly care, housing, and social assistance.

In terms of major indicators, those indicators related to people's livelihoods are the largest. Seven of the 20 major indicators in the draft outline concern people's livelihoods, accounting for more than a third of the total -- the highest of all past five-year plans. These indicators cover employment, income, education, medical care, elderly care, and childcare, and other areas of people's livelihoods. This fully demonstrates that we have placed greater importance on improving people's wellbeing.

Regarding employment and income, we will mainly step up efforts to offer more and better job opportunities and make steady progress to raise personal incomes. Employment is the cornerstone of wellbeing, while income is its wellspring. We will implement an employment-first strategy and give top priority to promoting employment in economic and social development. We will offer more job opportunities; improve the employment support system for key groups such as college graduates, rural migrant workers, and demobilized military personnel; assist people with disabilities, zero-employment families, and other groups facing difficulty in securing work; and keep the surveyed urban unemployment rate within 5.5%. We will improve the lifelong skills training system and continue to launch vocational skills training programs on a large scale to tackle structural unemployment. We will give special attention to raising the income of low-income groups and expanding the middle-income population. We will ensure growth in personal income that is basically in step with economic growth, and improve the mechanism for reasonable wage increases. We will raise the proportion of labor remuneration in primary distribution, improve the distribution mechanism to allow innovation to have its due share of income, and increase property income through multiple channels.

In terms of education, we will develop a quality education system. We will stay committed to giving priority to developing education to make it fairer and better. We will continue to improve the conditions of schools in counties with weak education foundations, places with high population inflow, and rural areas. We will build and renovate more than 4,000 primary and middle schools to promote quality, balanced and integrated development of urban and rural compulsory education. We will speed up efforts to strengthen weaknesses in pre-school education, build and renovate 20,000 kindergartens, offer more than 4 million places in government-funded and privately-run non-profit kindergartens. We will endeavor to deal with difficulties brought on by expensive fees and the shortage of preschools, and raise the gross enrollment ratio for preschool education to 90%. We will consolidate and improve the level of universal senior high school education to increase its gross enrollment ratio to over 92%. We will launch an initiative to improve the quality of modern vocational and technical education, develop a group of high-level vocational and technical colleges and training bases as well as relevant disciplines to cultivate various types of skilled craftsmen across the country. We will develop world-class universities and disciplines for different categories, encourage some regular undergraduate institutions to shift their focus toward providing applied education, support the development of 100 undergraduate institutions in the central and western regions of China, and raise the gross enrollment ratio for higher education to 60%.

With regard to healthcare, we will work to build a Healthy China in all respects. We will develop a strong public health system to improve our ability to respond to public health emergencies. We will improve the medical service system in which public medical institutions play a major role; support provinces with weak medical resources to build regional medical centers; and improve the capacity of community-level medical services with a focus on county-level hospitals. We will improve the quality and scale of medical personnel training and increase the number of certificated (assistant) doctors to 3.2 per 1,000 people and registered nurses to 3.8 per 1,000 people. We will improve the medical insurance system for the entire population, advance overall planning of basic medical insurance schemes at the provincial level, improve medical insurance and assistance systems for major diseases, ensure that medical expenses can be settled where they are incurred via basic medical insurance accounts, and actively advance the reform of centralized procurement and uses of medicine and consumables to reduce the burden of medical care for the public.

In terms of social security, the main aims are to help those most in need, to build a tightly woven safety net, and to build the necessary institutions. China has built the largest social security system in the world. During the 14th Five-Year Plan period, we will further improve the multi-tiered social security system, increase the basic old-age insurance coverage to 95%, realize the unified national management of old-age insurance funds, promote the provincial-level unified management of insurances for unemployment and work-related injuries, relax insurance eligibility for people with flexible employment, and ensure the full coverage of social insurance for all eligible population. We will gradually improve the basic pension standards for urban and rural residents, and promote the transfer and continuation of social insurance. At the same time, we will strengthen social assistance, ensure the basic needs of people in difficulties, and promote the development of charity.

In terms of senior and child care, we will mainly improve the service system for the elderly and the young. It is expected that China will enter the stage of a moderately aging society during the 14th Five-Year Plan period. The draft outline responds to social concerns by actively responding to population aging as a national strategy. We will vigorously develop public-interest services for elderly care, and build an elderly care service system with the coordination of services based on community and home, while promoting the integration of medical care and health care. We will improve elderly care service network based on community and home, promote the transformation of public facilities suitable for elderly people, take various measures to expand the supply of beds in elderly care institutions, and improve the service capacity and level. The proportion of nursing beds will be increased to 55%. We will develop an inclusive child care service system and boost the number of nurseries for children under 3 years old from 1.8 to 4.5 per 1,000 people. We will support businesses, public institutions, social organizations and other social forces to provide public-interest child care services, encourage kindergartens to develop integrated services, and improve the quality and level of child care and education. Thank you.

Phoenix TV:

We have seen some positive achievements in the construction of new urbanization in recent years, including granting urban residency to 100 million people from rural areas and other permanent residents without local household registration, and the increase of urbanization rate to more than 60%. My question is, what targeted measures are proposed in the draft outline to implement the new urbanization strategy and improve the quality of new urbanization? Also, how will the implementation of these measures be ensured? Thank you.

Hu Zucai:

Urbanization is the only path to modernization, the largest source of China's domestic demand potential and strong domestic market, and an important support for building a new development pattern. China has made major historic achievements in constructing new urbanization since the 18th CPC National Congress. The integration of people from rural areas into the city has accelerated. We have raised the percentage of permanent urban residents to 60% of the population, and the percentage of urban permanent residents with local household registration to 45%. The goal of granting urban residency to 100 million people from rural areas and other permanent residents without local household registration was met. The "19+2" pattern of city clusters has been basically established and cities have taken on a new look.

During the 14th Five-Year Plan period, China's urbanization rate will be between 60% and 70%, which is still a middle and late stage of rapid development, and also a key period of China's comprehensive transformation. We should adhere to the path of new urbanization with Chinese characteristics, deeply promote the new urbanization strategy with a people-centered approach, and comprehensively improve the quality of urbanization development.

First, we will deepen reforms of the household registration system, and move faster to grant permanent urban residency to people who move to cities from rural areas in an orderly manner. At present, there are still more than 200 million people from rural areas and live in cities without permanent urban residency. Among those who have registered as permanent residents, some have not fully integrated into the city. Giving permanent urban residency to people who move to cities from rural areas is still the primary task of new urbanization. We will continue to prioritize household registration of existing residents and at the same time grant urban residency to more new residents. Moreover, we will advance the reform of the household registration system and the full coverage of basic public services, and move faster to integrate urban residents from rural areas into cities. 

On one hand, we will continue to relax restrictions on household registration and grant urban residency to those who would like to settle down in cities. We will relax restrictions on permanent urban residency except in some megacities. We will try out a household registration system based on permanent residence, and move faster to grant permanent urban residency to people from rural areas with stable employment and residence in the city. Cities with a permanent resident population of under 3 million people should completely abolish restrictions on household registration, ensuring that people from rural areas, either local or non-local, share the same standards in applications of household registration. The eligibility for household registration in cities with a permanent resident population of 3-5 million will be relaxed in an all-round manner. Megacities with a permanent resident population of more than 5 million should improve their point-based household registration system, simplify the point-based measure, and focus on two parameters – social insurance records and number of years living in the city. Cities where conditions are mature are encouraged to cancel the annual quota on permanent urban residency. At the same time, we should safeguard the ownership rights, contract rights and land management rights of those from the countryside who settle down in cities.

On the other hand, we will promote the equal access of permanent residents to basic urban public services, achieving "equal treatment and sufficient supply." We will improve the basic public service provision mechanism based on residence permit, residency years and other conditions, encourage local governments to provide more basic public services and convenience, improve the level of compulsory education in urban areas, housing support and other services for residence permit holders, and allow non-registered residents to enjoy basic public services equal to registered residents on a gradual basis.

At the same time, we will speed up work on granting permanent urban residency to people who move from rural to urban areas, and introduce policies for making both the transfer payments and the land designated for urban development granted to the government of a local jurisdiction conditional upon the number of people with rural household registration who are granted permanent urban residency in that jurisdiction.

Second, we will optimize the structure of urbanization and promote the coordinated development of large, medium and small cities.

We should promote development of megacities toward a leaner and healthier mode. The COVID-19 epidemic has exposed various problems in megacities such as high population density and poor risk resistance capacity. We should focus on three aspects to solve these problems. First, we should delimit and stick to the boundary of urban development and be cautious in removing counties and establishing districts. Second, we should relieve non-core functions of cities in an orderly manner, guide the over-concentrated resource elements to transfer to other regions in a gradual and orderly manner, and properly reduce development intensity and population density of central urban areas. Third, we should promote synergized development of big cities with nearby small- and medium-sized cities and suburban new towns. We will cultivate and develop a number of modern metropolitan areas by better integrating transportation.

Large- and medium-sized cities should improve their functions. We should give full play to the advantages of relatively low comprehensive cost in large- and medium-sized cities that can help transfer industries and relieve functions of super-large cities, and improve the service function and quality of life in cities.

Counties should speed up to make up for their weaknesses, promoting urbanization with counties as important carriers. Counties occupy an important position, serving hundreds of millions of rural dwellers and are an important support for expanding domestic demand. In most areas, counties are still the first choice for rural residents seeking medical treatment, obtaining employment and enrolling their children in school. At present, there are still many weaknesses in the construction of counties. We must promote urbanization construction with counties as important carriers. Since last year, we have been adjusting measures according to local conditions and giving targeted guidance, speeding up the improvement of their weaknesses of counties and large townships, improving top-level design, and strengthening financial support. During the 14th Five-Year Plan period, we will support the construction of counties with better foundation in the east of the country, focus on supporting the county construction in central, western and northeast regions, give support to the construction of counties in major agricultural producing areas and key ecological function areas, and strengthen the construction of border towns. We will actively promote the upgrading and capacity expansion of 17 facilities in the four major areas of public services, environmental sanitation, municipal public utilities and industrial development, and enhance the comprehensive carrying capacity and governance capacity of counties.

Third, we will comprehensively improve the quality of cities and promote livability and employability. We will also promote measures to fix shortfalls in infrastructures such as public transport, parking lots and charging stations, of which there is strong demand from the public; strengthen the construction of flood control and drainage systems; promote urban waterlogging controls; and complete the renovation of 219,000 old urban residential communities built before the end of 2000. We will also use digital technology to improve urban governance, so that urban residents can enjoy a higher quality of life.

Reuters:

How would you like to implement the reforms regarding the new "dual circulation" development paradigm during the 14th Five-Year Plan period? Why is the economic growth target for 2021 set at above 6%? What is the consideration for it? Why didn't you set an economic growth target for the 14th Five-Year Plan period? In 2021, what should we do to prevent asset bubbles, financial risks and debt risks brought about by the easy monetary policies rolled out last year? Thank you. 

Zhao Chenxin:

Thank you for your question. I think, according to what you've asked, your major concern is about reform. The first reporter also asked about reform. People are really concerned about it. Indeed, we should strive to reform with relentless efforts. As we enter the 14th Five-Year Plan period, we should give further play to the key role of deepening overall reform. At the recent 18th meeting of the central committee for deepening overall reform , General Secretary Xi Jinping emphasized five priorities for deepening reforms, including implementing a high-level of self-reliance and self-improvement, facilitating economic circulation, expanding domestic demand, as well as carrying out high-level opening-up and promoting comprehensive green transformation. These five priorities are very important. They are the fundamental principles that we will follow in future reforms.

You also asked about the macro control policies to balance economic growth while preventing risks. My understanding is as follows. Actually, Mr. Ning has talked about it. We should, on the one hand, have bottom-line thinking and prepare for potential risks, on the other, we should also strengthen follow-up analysis, make adjustment according to circumstances, and respond in a rapid, targeted and scientific manner. Additionally, we should unswervingly advance reform, so as to defuse risks and challenges. I would like to introduce the major reforms that the National Development and Reform Commission will advance this year in five aspects:

First, we will step up efforts to stimulate the vitality of various market entities. In term of the state-owned economy, the focus will be on optimizing its layout and making structural adjustment. The state-owned capital and enterprises will play more important roles in sectors concerning strategic security, industrial progress, the national economy and people's livelihood, as well as public services, so as to adjust and optimize the industrial structure. We will advance mixed-ownership reform scheme of the state-owned enterprises in a proactive and steady manner, especially in the four batches of over 200 state-owned enterprises pilots. We will foster a batch of new model enterprises and collect typical cases, and sum up practical experience as soon as possible so as to formulate measures for deepening structural reform in state-owned enterprises. In terms of the private economy, which many are also concerned about, our priority is to improve the environment for the development of the private economy, and step up efforts to eradicate barriers and obstacles which hinder the development of private enterprises. Moreover, we will strengthen monitoring the operation of the private economy, and establish some model cities to guide the development of the private economy nationwide.

Second, we will strive to establish a high-standard market system. The work can be summarized in following three aspects. We will implement the action plan to guide the building of a high-standard market system, so as to make it perform better. We will accelerate the development of a unified market. To promote efficient allocation of factors, we will continue to deepen reforms to encourage market-based allocation of land, the labor force, capital, technology and data. In order to improve market access, we will adopt a unified management model, and optimize dynamic adjustment mechanisms for the negative list. We will revise and roll out the market access negative list for 2021 in order to continue to remove various invisible market access barriers. We will also formulate and roll out special measures to ease market access in Hainan province and the city of Shenzhen.

Third, we will deepen reform in major sectors. For example, the power sector should strive to establish a unified electricity market system nationwide, and increase spot trading pilots for electricity. The oil and natural gas sectors shall deepen reform of the oil and gas pipeline operation mechanism, and ensure the implementation of reform measures in terms of equipment manufacturing, design and construction in power grid enterprises. The oil and natural gas industries should strive to reform the pipeline network operation mechanism, and accelerate the building of a unified network. Efforts will be made to ensure the equal access to the national pipeline network among market entities. We will also improve the government's storage system and mechanism for crude and refined oil. We will deepen market-oriented reform in the railway industry, and promote moderate competition among the railway transportation companies.

Fourth, we will ramp up efforts to drive green transformation. We will accelerate our steps to build up the nationwide markets for trading energy consumption rights and carbon emission rights, so as to peak carbon dioxide emissions and achieve carbon neutrality. We will improve the system for controlling the total amount and intensity of energy consumption, and optimize  systems and mechanisms for the coordination between the increase, consumption and storage of clean energy. We will establish and improve the mechanism to realize the value of ecological goods, and formulate ecological damage compensation regulations.

Fifth, we will enhance our capacity to safeguard the people's wellbeing. Mr. Hu has introduced some measures in this regard, and I'd like to add some more information. We will improve the policies and systems for distribution based on factors of production. We will improve the mechanism to ensure the returns for factors of production are determined by the market, and work to increase factor income of the low- and middle-income groups, so as to strive for common prosperity. Moreover, we will improve the price control mechanism of important livelihood commodities, and establish and improve a system of standards for basic public services. We will also boost the healthy development of elderly care and childcare services, and reform and improve the public service system of national fitness. Through these reforms, we aim to meet the people's increasing needs for a better life. Regarding the reforms, that's all I would like to introduce.

Hu Zucai:

I would like to answer the question about the gross domestic product (GDP) target set for the 14th Five-Year Plan period. GDP, as a comprehensive indicator, has always been a focus of attention. It has been contained as a major economic indicator in the draft outline of the 14th Five-Year Plan (2021-2025) for national economic and social development. The document sets the goal of keeping the average annual growth in an appropriate range, and stipulates that annual target [for economic growth] be set in light of actual conditions. This is the first time in our history of formulating five-year plans. Such a growth target is qualitative overall, with quantitative objectives being implied. It is a prudent adjustment made advisedly in light of the overarching target of promoting modernization. It is also a decision made after considering the development trend, domestic and external environment in the 14th Five-Year Plan period. I think we should understand this in a comprehensive and accurate manner.

First, GDP is a core indicator of a country's economic development. It also reflects the comprehensive economic strength and international competitiveness of a country. Therefore, GDP has been contained in the draft outline as one of the major indicators, but the target has been expressed in a different way.

Second, as China has entered a new stage of high-quality economic development, it is not reasonable to assess its development by simply looking at the GDP growth rate. We should not just pursue economic growth without considering the quality and effectiveness of development, as well as the ecological and environmental impact. On the other hand, economic growth does matter when it comes to the target of realizing modernization. China is still the world's largest developing country, and development remains the basis for and the key to tackling every problem we face. The draft outline has taken both above aspects into consideration. However, it does not mean that we will not need a GDP growth rate any longer. It was pointed out at the fifth plenary session of the 19th CPC Central Committee that China's per-capita GDP will reach the level of a moderately developed country by 2035, which means that its GDP growth rate in the coming 15 years has to be kept in an appropriate range. Moreover, the draft outline has set specific targets for other major indicators, including that of the unemployment rate, energy intensity and carbon intensity. All of them are interconnected with GDP, which means that we should strive to keep the economic growth in line with the potential growth rate. 

Third, we are confident that GDP growth rate will maintain at a certain level, which is proven by a comprehensive study and calculation with the participation of many think tanks. However, given the great uncertainties in the domestic and external environment in the next five years, the decision to not set a specific and quantitative growth target will make us more proactive, active and at ease in coping with all sorts of risks and challenges. It will help boost the flexibility of development and leave room for tackling uncertainties. It will also help us focus on improving the quality and effectiveness of development. Compared to five years, the annual situation is easier to study and judge, so in the annual work, the annual growth target can be determined in a targeted manner, depending on the situation, such as changes in the internal and external environment and the economic performance. Thank you.

Bloomberg:

I would like to ask about strengthening China's science and technology. What will be the priorities during the 14th Five-Year Plan period to this end? What will China do to boost the investment into science and technology? Do you have an expectation for its amount? Thank you.

Ning Jizhe:

Strengthening China's science and technology is a very important topic, and the speakers have all talked about it more or less just now. The country will accelerate it during the 14th Five-Year Plan period, including this year. Specifically, we will improve our strategic scientific and technological strength, boost basic research, applied research, and the transfer and transformation of scientific and technological outcomes, and further improve China's core industrial competitiveness. As for the specific projects and investments that you just asked about, there is a target set out in the 14th Five-Year Plan that China's R&D spending will increase by more than 7% per year, which is expected to account for a higher percentage of GDP than that during the 13th Five-Year Plan period. The figure already increased fast during the 13th Five-Year Plan period, taking up 2.4% of GDP last year. We will strive to surpass it during the 14th Five-Year Plan period.

In terms of key projects, first, the construction of national laboratories should be accelerated, and the system of national key laboratories should be reorganized.

Second, we will facilitate basic research, including formulating and implementing a ten-year action plan, and establishing a number of research centers for basic disciplines.

Third, we will further plan and implement the Sci-Tech Innovation 2030 Agenda to seek breakthroughs in core technologies in key fields.

Fourth, in terms of new infrastructure construction, some of the previous major scientific and technological infrastructure projects are now operational, such as the Tianyan Telescope built up through a long period of effort. We will build more, and advance scientific and technological innovation in artificial intelligence, quantum science, brain science and other sectors.

Fifth, in terms of international centers for science and technology innovation and national science centers, we will develop international centers for science and technology innovation in Beijing, Shanghai, the Guangdong-Hong Kong-Macao Greater Bay Area, as well as comprehensive national science centers in Huairou, Zhangjiang, Hefei, and the Guangdong-Hong Kong-Macao Greater Bay Area with greater efforts. We will also develop a nationally influential scientific and technological innovation center in Chengdu and Chongqing based on a quality plan.

Sixth, we will improve a number of multi-level innovation platforms, including national industrial innovation centers, technological innovation centers, manufacturing innovation centers, engineering research centers, and technological centers of enterprises.

Seventh, we will organize and implement demonstration projects for integrated innovation. As enterprises are the mainstay of technological innovation, we will motivate large enterprises to share their resources, scenarios, applications, and innovation needs with small and medium-sized enterprises to create an ecosystem of innovation and entrepreneurship based on industrial chains and supply chains. We will motivate enterprises to increase R&D spending with tax incentives. Now, over 70% of all R&D funding comes from enterprises, and we will make that proportion even higher. At last, we will continue to support mass entrepreneurship and innovation, and construct demonstration bases for innovation and entrepreneurship. Thank you.

Hu Zucai:

China spent a total of 2.44 trillion yuan in R&D in 2020, accounting for 2.4% of its GDP, a record high in history and maintaining its position as the second in the world. The draft outline aims for China's R&D spending to increase by more than 7% per year. Total R&D spending will reach 3.76 trillion yuan by 2025 if it grows at 7% every year. Of course, we have calculated it at the current prices in 2025, not at a constant price. It is a quite big increase, 1.32 trillion yuan more than in 2020 and higher than that during the 13th Five-Year Plan period. As you may have noticed, this time in the draft outline, we have put basic research in a more important position, and elaborated it in a special section. We have also, for the first time, set an indicator -- the proportion of basic research expenditure to R&D expenditure -- in the draft outline. This figure was 6.16% in 2020, much less than that of developed countries. The draft outline proposes that it will reach over 8% by 2025 during the 14th Five-Year Plan period, a very positive direction to work towards. Spending in this area reached 150.4 billion yuan in 2020, and is expected to reach about 280 billion yuan in 2025 (calculated at the constant price in 2020), and we will strive to make it even higher. It sends a clear message that we will value basic research more. Thank you.

CNR:

How will China coordinate regional development during the 14th Five-Year Plan period? The State Council recently approved the establishment of a joint working mechanism between the local governments and central government departments to revitalize northeast China. What measures will there be to promote the revitalization? Thank you.

Zhao Chenxin:

Thanks for your questions, which are both about regional development. The CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to regional development, and further implemented the strategies for coordinated regional development since the 18th CPC National Congress. Under major strategies for the coordinated development of the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Yangtze River Delta, and the ecological protection and high-quality development of the Yellow River basin, those regions have all taken on their respective functions, and moved on to better paths of development. As they now become increasingly coordinated in development, we will seek even better coordination during the 14th Five-Year Plan period, mainly from the following three aspects:

First, we will further implement major regional strategies. In the Beijing-Tianjin-Hebei region, we will relocate non-essential functions from Beijing in a steady and orderly manner, and build the Xiongan New Area according to high quality standards. In the Yangtze River Economic Belt, we will put ecology first and pursue green development, and promote high-quality development while protecting it rather than developing it in a large scale. In the Guangdong-Hong Kong-Macao Greater Bay Area, we will develop a dynamic and internationally competitive first-class bay area and a world-class city cluster. In the Yangtze River Delta, we will enhance its integrated development by forming a new development paradigm first, and make it a foundation and role model for high-quality development across the country. In the Yellow River basin, it is important to make a good start in ecological protection and high-quality development, to ensure significant progress during the period.

Second, we will continue to push forward the strategies for coordinated regional development. We will release more nuanced policies in the western region, promote coordination within it, and form a new paradigm featuring better protection, further opening up, and high-quality development. We will facilitate breakthroughs in the comprehensive revitalization of the northeast, and coordinate policies to ensure national defense, food, ecological, energy, and industrial security. We will speed up the rise of the central region by equipping it with a modern industrial system with advanced manufacturing as the mainstay. We will accelerate the modernization of the eastern region, which will include upgrading its industries by enhancing their capabilities in scientific and technological innovation, and engaging more in international economic cooperation at a higher level. We will also coordinate land and marine development, develop the maritime economy, and build the country into a strong maritime country. We will motivate functional platforms such as national-level new areas to lead in-depth reforms and further opening-up, and consequently, lend fresh impetus to the real economy.

Third, we will focus on building a regional economic layout with complementary advantages for high-quality development. The focus is on improving the institutional mechanism for coordinated regional development, supporting regions in giving full play to their comparative advantages, promoting the rational flow and efficient concentration of various factors, enhancing the momentum of innovative development, and building a power system for high-quality development. We will enhance the carrying capacity of central cities, urban agglomerations and regions with advantageous economic development in terms of economy and population, and support other regions in enhancing their functions in safeguarding national food security, ecological security and border security. Through these efforts, China's regional development will be more coordinated, more efficient and of higher quality.

I would also like to mention the joint working mechanism to revitalize northeast China. General Secretary Xi Jinping has visited the northeast region many times and made many important instructions on this issue since the 18th CPC National Congress. It fully reflects the great attention and earnest expectations of the CPC Central Committee with Comrade Xi Jinping at its core for revitalizing northeast China. The NDRC and other government departments have continuously improved the "1+N+X" policy system for revitalizing the region. Under our policies and work plans, the region made new progress in its revitalization. We then set up the joint working mechanism under the State Council's Leading Group for Revitalizing Northeast China and Other Old Industrial Bases. It was established with the approval of the State Council for better coordination and supervision of related work. NDRC deputy head Cong Liang has taken charge of it, and related work has already started. Through this implementation plan, we will plan the main ideas, key tasks, major projects and major policies for the next step of the revitalization of northeast China, and through a series of efforts, we will promote a new and greater breakthrough in the revitalization of northeast China. Thank you.

Southern Metropolis Daily:

Due to extremely cold weather, China's electricity consumption load last winter hit a new record, even higher than last summer. Will this situation become normal in the future? And we know the U.S. state of Texas recently suffered a large-scale and long-lasting power outage due to extremely cold temperatures. Facing new changes in the energy industry, what measures will the government take to guarantee energy security? Thank you.  

Zhao Chenxin:

Thank you for your questions. As you said, there have been some new changes, new situations and new challenges to China's energy operation and supply. I'll address the subject from these three aspects.

First, let's review the basic situation at that time. As winter began, China's energy demand — especially its electricity demand — grew rapidly, due to the rapid recovery of economic activities and a large-scale cold front. The nation's peak power load hit new record highs on four days: last Dec. 14, 16 and 30, and this year on Jan. 7. In particular, the evening peak load nationwide hit 1.189 billion kilowatts on Jan. 7, which was more than 10% higher than last summer's peak. On the same day, the nation's power generation reached 25.967 billion kilowatt-hours. In a situation like this, it's difficult to fully satisfy the electricity demand. Currently, China's installed power generation capacity is more than 2 billion kilowatts. Therefore, it seems that we should have no problem with such huge installed capacity. However, since the peak load occurred at night, solar power generation, that is to say, photovoltaic power generation, could not be used. In addition, there was no large-scale wind across the country on Jan. 7, so we could only generate about 10% of wind power. The total installed capacity of wind and photovoltaic power generation is 530 million kilowatts, but there were 500 million kilowatts that could not be used. The total installed capacity of hydropower is 370 million kilowatts. However, as winter is the dry season, more than 200 million kilowatts could not be used during the peak load period. In addition, the peak of natural gas consumption occurs in winter. China's installed natural gas-fired power generation capacity is nearly 100 million kilowatts, but around 50 million kilowatts could not be used. As a result, it is really difficult for the remaining installed capacity to meet the demand of high load. We also need to consider the problems of regional capacity and shutdowns of generators for maintenance. No matter the difficulty, in accordance with General Secretary Xi Jinping's instructions on sticking to the people-centered philosophy of development, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) organized localities and central State-owned enterprise (SOEs) to make all-out efforts to meet the challenge, and we finally succeeded in ensuring smooth and orderly operation of the energy sector and stable and efficient power supply, especially supply for people's livelihood. No major problems occurred. The sharp contrast between us and the case you mentioned just now is a good manifestation of China's institutional strengths and our putting people first.

Second, let's talk about our evaluation of the new situation. Previously, peak energy consumption normally occurred in summer because of the rapid increase of the air conditioning load. According to our analysis, the unusual winter peak was mainly caused by the increasing demands for clean heating in northern China and for electric heating in southern China in recent years. Increases in air conditioning and electric heating loads both show the desire of the Chinese people for a better life. We must ensure stable energy supply to meet their aspiration. Therefore, the NDRC and the NEA have organized different sectors to carry out in-depth research, because we should take into consideration the safety, affordability and sustainability of energy supply, establish an energy system that is clean, low-carbon, safe and efficient, and  achieve peak carbon emissions and carbon neutral goals. As such, we are preparing the next work plan.

Finally, let's talk about what should be done. This can be summed up in one sentence: We will fully implement General Secretary Xi Jinping's instructions on improving energy production, supply, reserve and sales systems. We have already made relevant plans, and the next step is implementation. In terms of production, we will strengthen the supply of energy resources by establishing a diversified power generation system featuring stable operation. In terms of supply, we will improve energy resource allocation by promoting the coordinated development of power grids at different levels nationwide. In terms of reserve, we will shore up our weak links in energy reserve by strengthening our reserve capacity in an all-round way. In terms of sales, we will build a modern energy market system and use market-based measures to deepen energy demand side management.

In conclusion, in recent years, in accordance with General Secretary Xi Jinping's requirement for a new energy security strategy featuring "Four Reforms" and "One Cooperation," we have secured profound progress in energy sector. We have prominent institutional strengths, a strong material foundation and rich supply experiences to confidently ensure energy security during the 14th Five-Year Plan period, and enhance people's sense of satisfaction. Thank you.

Kyodo News:

My question is about foreign investment. Some foreign-funded companies are worried that certain policies, such as the export control law, may impose restrictions or obstacles on their investment in China. How can you make foreign-funded companies reassured about their investment in China during the 14th Five-Year Plan period?

Ning Jizhe:

China's paid-in foreign direct investment (FDI) bucked the trend last year despite a sharp contraction in global cross-border direct investment. In 2020, nonfinancial FDI into China rose to $144.4 billion, up 4.5% year on year. In January this year, the country made a good start in the use of foreign capital, which reached $13.5 billion, up 6.2% year on year. Foreign-funded enterprises have maintained stable operation and production in China, and a number of major foreign-funded projects are being implemented steadily  despite the impact from the COVID-19 pandemic. A total of 94% of U.S. companies are optimistic about the business outlook in China this year, and more than half said that China remains their top investment destination, according to the 2021 White Paper on the Business Environment in China released by the American Chamber of Commerce in South China. However, it is not only companies from the U.S. Those from Japan, Europe and elsewhere are also optimistic about the business outlook in China. 

The next step of promoting stable foreign investment still faces many challenges. In 2021, the NDRC, in line with the deployments of the CPC Central Committee and the State Council, will carry out opening-up in a larger scope, wider areas and at a deeper level, and step up building of a new system for a higher-level open economy. The country will fully implement the foreign investment law to better promote and protect foreign investment and continue to improve its business environment. 

First, we will continue to reduce the negative lists for foreign investment. China revised its negative lists of foreign investment for four consecutive years from 2017-2020. The number of sectors that are off-limits for foreign investors has been cut by nearly two-thirds. A series of major opening-up measures have been launched in finance,  automobile, and other sectors, and the manufacturing industry has been basically opened up. In 2021, we will further shorten the negative lists for foreign investment, with more efforts made to ensure opening-up of the manufacturing industry and promote the orderly opening-up of the service industry. We will extensively introduce advanced technology, management experience and business models, and promote high-quality economic development with a high-level of opening-up. At the same time, we will also give full play to the FTZs' role as the "test field" for further opening-up, and encourage them to continue pilot projects.

Second, we will continue to expand the fields where foreign investment is encouraged. The new 2020 Catalog of Industries Encouraging Foreign Investment  took effect this January, adding 127 items to the list and further expanding the scope for foreign investment. Next, we will focus on its implementation, apply combined measures of boosting the increment, stabilizing the stock and enhancing the quality, and improve the relevant supporting policies. We will actively channel more foreign investment into fields like advanced manufacturing, high technologies, and energy conservation and environmental protection, as well as into producer services such as research, development, and design; modern logistics; and information services. Finally, investment will be encouraged in China's central, western, and northeastern regions to give better play to foreign capital's role in ensuring the stability of industrial and supply chains.

Third, we will ramp up efforts to promote the implementation of major foreign investment projects. In 2018, the NDRC led the establishment of a special task force for major foreign investment projects to coordinate project implementation and solve any problems involved. So far, four batches of major foreign investment projects have been launched, with a total investment of more than US$110 billion. This year, we will launch the fifth batch of such projects and provide policy support in industrial planning, land use, environmental assessment, and energy use, etc. We will continue to focus on fields like advanced manufacturing and high technologies when supporting major foreign-invested projects. We will encourage foreign investors to participate in the high-quality development of China's manufacturing sector, in the construction of new infrastructure and in China's innovation-driven development, and better leverage the exemplary role of these projects. We will encourage localities to improve their mechanisms, promote coordination at all levels, and provide services at every stage of the project.

Fourth, we will fully implement a post-establishment national treatment for foreign investment. Since last year, China, in accordance with the arrangements to ensure stability on six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations) and maintain security in six areas (employment, people's livelihood, market entities, food and energy, industrial and supply chains, and operations at grassroots levels), has introduced a series of measures in fields including tax, finance, and social security to alleviate difficulties encountered by enterprises. These measures are equally applicable for foreign companies. We will continue to promote the equal treatment of foreign and domestic enterprises in terms of government procurement, land supply, the reduction and exemption of tax and fees, license applications, standards-setting, project application, and human resources policies, among others. 

Regarding the Export Control Law  that has drawn some foreign enterprises' attention as you mentioned, the purpose of the law is to restrict the export of dual-use items, military items, and other controlled items. It also means that domestic and foreign enterprises are treated equally in terms of the control scope and measures. In general, the normal export of foreign enterprises won't be affected.

Fifth, we will effectively strengthen oversight for business services. We will more actively introduce relevant policies and measures to foreign enterprises, enhance information services through multiple channels, and readily resolve difficulties faced by foreign-funded projects in investment, production, and operation in a coordinated manner to create a more convenient environment for foreign enterprises to invest in China. At the same time, we will continue to refine the regime of pre-establishment national treatment plus negative list for foreign investment, and security reviews of foreign investment. We will work to establish a fair, transparent, efficient, and safe regulatory system that is in line with high-level opening-up and international norms, in order to foster a favorable investment environment. Thank you.

China News Service:

The draft outline of the 14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-range Objectives Through the Year 2035  (referred to as the "draft outline" hereafter) explicitly points out that China will make more active and effective efforts to promote common prosperity. What are the specific measures in this regard? Thank you. 

Hu Zucai:

Common prosperity is an essential requirement of socialism, a shared aspiration of the Chinese people, and also a goal that our Party has been unwaveringly committed to. Since the 18th National Congress of the Communist Party of China (CPC), common prosperity has taken on new implications and secured more solid progress. A significant step is the complete victory in eradicating absolute poverty. Our success in building a moderately prosperous society in all respects has also laid a solid foundation for promoting common prosperity. The fifth plenary session of the 19th CPC Central Committee made major arrangements for the promotion of common prosperity, and for the first time in the history of the plenary sessions of our Party, set the long-range goal of " achieving more notable and substantial progress in promoting common prosperity for everyone" by 2035. Common prosperity itself is an important goal of socialist modernization. As China has embarked on a new journey toward fully building a modern socialist country, we must attach greater importance to common prosperity and make a more proactive and meaningful effort to fulfill this goal.

Common prosperity has distinct features of the times as well as Chinese characteristics. As far as I'm concerned, we should have an overall understanding of common prosperity from the following four aspects:

First, common prosperity means "prosperity for all." It is not the prosperity for some people or some regions, but the shared prosperity for all Chinese people. It means that all Chinese people share the benefits of development and live a happy and fulfilling life.

Second, common prosperity refers to "comprehensive prosperity," which includes both material and spiritual prosperity. It means not only affluence in life but also confidence and self-improvement in spirit. It also entails a comfortable environment for living and working, social harmony, and universal access to public services. In short, common prosperity is to realize people's all-around development and social progress. 

Third, common prosperity points to "shared prosperity through joint contribution." Common prosperity requires the hard work and mutual assistance of all people. Everyone participates and contributes, and benefits are enjoyed by all. With concerted efforts, we build a better home and live a better life.

Fourth, common prosperity means "realizing common prosperity gradually." Achieving prosperity for all is a long-term and arduous task. It is a gradual process. We must abide by the law of development and act proactively, all the while keeping our feet on the ground and committed to persistent efforts instead of being divorced from reality. We should achieve the goal of common prosperity step by step on the road toward modernization.

The four aspects are my overall understanding of common prosperity. 

The draft outline sets the goal of making solid progress toward prosperity for all Chinese people and puts forward the requirement of making more active and effective efforts to promote common prosperity. These are actually further plans for advancing common prosperity. We should focus on the prominent contradiction of unbalanced and inadequate development; give priority to narrowing the disparities in development between urban and rural areas, and between regions, and in income distribution; and secure solid progress toward common prosperity while furthering high-quality development. In other words, we should both make the cake bigger and share it fairly. We will proactively solve problems such as wealth disparity between regions, between urban and rural areas, and in incomes. We will safeguard and improve people's livelihoods in the course of development, and enhance people's well-being by coordinating advances in employment, income distribution, education, social security, health, housing, elderly and child care, among other areas. We will pay more attention to weighting more toward rural, grassroots and less-developed areas, and disadvantaged groups, to promote social equity and justice. In this way, we hope all the people can enjoy the fruits of development in a fairer way and feel a greater sense of gain through joint contribution and shared benefits. We will pool the tremendous strengths of all the people to build China into a modern socialist country.

According to the arrangements of the CPC Central Committee, the draft outline proposes that an action plan for promoting common prosperity be formulated. This is a top-level design, which will clarify the direction, goals, key tasks, pathways and methods, policies, and measures for achieving common prosperity. The NDRC is taking the lead and cooperating with relevant departments for the formulation work. In addition, the draft outline calls for supporting Zhejiang province to build a common prosperity demonstration zone through high-quality development. There, top-level design and demonstration zone construction are both being promoted. Zhejiang boasts relatively good conditions in all aspects, with its urban-rural gap, regional development, and affluence indicators all leading the country. Therefore, the draft outline makes it clear that Zhejiang will be supported to build a common prosperity demonstration zone through high-quality development. The main task is to explore institutions, mechanisms, and systems for boosting common prosperity, gain experiences that can be replicated and applied in other areas, and make solid progress in this regard. Thank you.

Chen Wenjun:

Today's press conference is concluded. Thank you all.

Translated and edited by Duan Yaying, Huang Shan, Xiang Bin, Guo Yiming, Gong Yingchun, Li Huiru, Zhang Liying, Zhang Jiaqi, Chen Xia, Wang Mengru, Zhang Junmian, Xu Xiaoxuan, Liu Qiang, Wang Qian, Zhu Bochen, Yuan Fang, Cui Can, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Read in Chinese

Speakers:

Guo Wei, deputy director of the State Council Research Office

Sun Guojun, member of the Leading Party Members Group of the State Council Research Office

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

March 5, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this briefing held by the State Council Information Office. The fourth session of the 13th National People's Congress (NPC) opened this morning, and Premier Li Keqiang delivered the annual Report on the Work of the Government. To help the public better understand the report, we have invited Mr. Guo Wei, deputy director of the State Council Research Office, and Sun Guojun, a member of the Leading Party Members Group of the State Council Research Office. They will elaborate on the report and take your questions. First, we will give the floor to Mr. Guo.

Guo Wei:

Friends from the media, good morning. Earlier today, Premier Li Keqiang delivered the Report on the Work of the Government at the fourth session of the 13th National People's Congress. The report upholds Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide. It fully implements the guiding principles of the 19th National Congress of the Communist Party of China (CPC); the second, third, fourth, and fifth plenary sessions of the 19th CPC Central Committee; and the annual Central Economic Work Conference in 2020. The report reviews the main work on social and economic development last year, and summarizes the achievements made during the 13th Five-Year Plan (FYP) period and the main targets and tasks for the 14th FYP period. It also puts forward the main projected targets and macro policy directions concerning this year's social and economic development and makes arrangements for the main agenda of this year.

I've read some of the responses posted on the internet on my way here. Many say that the report responds to people's concerns and reflects the expectations of all parties. Some says that after listening to the report, they feel proud of the nation's achievements, inspired by the policies of the central government, and are more confident when facing difficulties. Others say that new policies make them feel assured, and that the recent progress brings them so much hope. We participated in the drafting process of the report, and also felt very inspired when listening to Premier Li delivering the report at the Great Hall of the People today. We feel that the report is indeed practical and informed by the realities on the ground. It rallies people together and boosts our confidence.

This year is rather special as it marks the beginning of the 14th FYP, the embarkment of a new journey toward fully building a modern socialist country, and the 100th anniversary of the founding of the CPC. The drafting work of the report was very crucial, and great importance was attached to it by the CPC Central Committee and the State Council. General Secretary Xi Jinping made important instructions on the drafting of the report and chaired meetings of the Political Bureau of the CPC Central Committee and of its Standing Committee, studying and discussing the draft and putting forward specific requirements for revising. Premier Li presided over the drafting and revising of the report, and chaired executive and plenary meetings of the State Council to discuss the draft. Premier Li also presided over themed symposiums many times to directly listen to opinions and suggestions from all parties. Other leaders of the State Council also gave concrete instructions on the drafting and revisions of the report. The drafting work collected opinions and suggestions from all provinces, autonomous regions and municipalities; central departments in the Party, the government, the military, and people's organizations, as well as some central State-owned enterprises.

The report consists of three major parts. The first part briefly reviewed last year's work and achievements. The report notes that last year was an extraordinary year in the history of the People's Republic of China. We've achieved major strategic success in our response to COVID-19, and China was the world's only major economy to achieve growth. We attained a complete victory in the fight against poverty and scored decisive achievements in our efforts to build a moderately prosperous society in all respects. We owe our achievements to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and the concerted efforts of the Party, the armed forces, and the Chinese people of all ethnic groups. 

The 13th FYP concluded last year, and the 14th FYP starts this year. Acting in accordance with the Recommendations of the Central Committee of the Communist Party of China for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035, the State Council has drawn up the draft Outline for the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035. The second part of the report briefly introduced the content of the draft outline and summarized the achievements made during the 13th FYP period and the main targets and tasks for the 14th FYP period.

Based on the analysis of the development in and outside China, the third part of the report made comprehensive plans and arrangements for the main tasks and policies of the government this year.

Next, Mr. Sun and I will take questions from you regarding drafting of the report. Thank you.

Shou Xiaoli:

Thank you, Mr. Guo. The floor is open for questions. Please identify your news outlet before asking question. Thank you.

CCTV:

This year's government work report points out from the very beginning that last year was an extraordinary year in the history of the People's Republic of China. It also states that the work last year was truly challenging. Given the achievements of last year, how do we best understand and define "extraordinary" and "challenging?" Thank you.

Guo Wei:

I think it is quite accurate to describe last year as extraordinary.

Last year, our tasks were extraordinary. We needed to achieve decisive success in eliminating absolute poverty and secure a full victory in building a moderately prosperous society in all respects.

Last year, the difficulties and challenges we faced were exceptional. We encountered combined adverse and severe impacts rarely seen in a century. First, the sudden outbreak of the once-in-a-century COVID-19 epidemic posed a serious threat to people's health and brought unprecedented difficulties to economic and social development as well as all aspects of work. In the first quarter of last year, China's economy registered a negative growth rate of 6.8%, which hasn't been seen since the reform and opening up. Second, the world economy found itself deep in recession and for the first time in history, the economies of all regions were hit hard simultaneously. The global economy suffered the worst recession since the Great Depression in the 1930s, which has directly affected the stability of foreign trade and the security of the industrial and supply chains in China. Third, the international landscape was complex and grave with many uncertainties. Economic globalization encountered headwinds and the impacts of unilateralism and protectionism were on the rise. In addition, some areas of our country suffered severe floods and typhoons.

Last year, the achievements in development that we secured were remarkable. Facing the severe and complex situation, the Chinese people of all ethnic groups, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, responded with tremendous tenacity and forged ahead with great resolve. We achieved major strategic success in the fight against COVID-19 and fully protected the health and safety of the people, creating fundamental guarantees and prerequisites for economic and social development. We took the lead in resuming work and production and were the first to achieve positive economic growth. At the same time, reforms in key areas and at key points were deepened, breakthroughs in opening up were made, people's livelihoods were effectively ensured, and 11.86 million new urban jobs were created. Society was harmonious and stable on the whole.

Last year, the goals we fulfilled were extraordinary in the historical development of the People's Republic of China. We attained a complete victory in the fight against poverty. All remaining poor rural residents were lifted from poverty, as were all of China's remaining poor counties, accomplishing the daunting task of eliminating absolute poverty that has existed in China for thousands of years. Our gross domestic product (GDP) exceeded the 100-trillion-yuan threshold, with the economic strength, composite national strength, and people's living standards reaching new levels. We made great progress in scientific and technological innovation. Our Chang'e-5 spacecraft successfully landed on the near side of the moon and brought back lunar samples. The new deep-sea manned submersible Fendouzhe (Striver) completed its 10,000-meter sea trials. Last year was a landmark year in many respects in the history of the People's Republic of China.

Last year, the efforts made by the Chinese people were also extraordinary. The COVID-19 pandemic broke out at the beginning of last year. You may recall that on the very day of the Lunar New Year, General Secretary Xi Jinping chaired a meeting to direct outbreak response. At that critical moment, more than 40,000 medical workers rushed to aid Wuhan in Hubei province, and manufacturers of masks, protective suits, and other medical supplies worked overtime to increase production. From medical staff to the People's Liberation Army, from scientific researchers to community workers, from volunteers to those who oversaw projects, people of all ages from all walks of life across China united to fight against the pandemic. Facing difficulties brought about by the economic downturn, the central government considerably reduced non-essential and non-obligatory expenditures and the provincial governments also cut spending to support those working on the ground as well as market entities. Many enterprises saw reduced profits but did their best not to cut jobs. Some employees who saw their salaries reduced stood together with the enterprises to tide over the difficulties. As the government work report reads, "Local authorities and government departments across the country kept in mind the big picture and shouldered their responsibilities. Market entities, over one hundred million in number, responded to shocks with fortitude and resilience. Our people worked hard and fought adversity in close solidarity and with the unyielding spirit of the Chinese nation."

It is fair to say that last year, the difficulties and challenges we faced were extraordinary, the achievements we secured were remarkable, the efforts we made were exceptional, and the success we gained was earned through resilience. The year 2020 is a year to remember in history. Thank you.

CNR:

My question is about the GDP. Last year's government work report did not set specific GDP targets, but we noticed that this year's report has set an expected GDP target of over 6%. For what reasons is this? Given the complex and challenging economic environment both at home and abroad, could you please give some comments on our economic development targets? Thank you.

Sun Guojun:

Thank you. I will answer your questions. Last year's report did not put forward a quantitative target for GDP growth rate. The biggest reason was the great uncertainty. China's economic growth rate was 2.3% in 2020, which was a better-than-expected result and not easy to achieve. 

Implementing the guiding principles of the recent Central Economic Work Conference, this year's government work report sets an expected target for economic growth at over 6%. I will list three factors that have been taken into full consideration.

First, we have taken into account the recovery of economic activity. China's economy has gradually recovered since the second quarter of last year. The momentum of improvement has continued during the third and fourth quarters, so that we can expect a generally stable economic performance this year.

Second, we have taken into account the base figures. For example, due to the base figures for 2020, we can expect an obvious year-on-year rise in GDP growth in the first quarter of 2021. Statistically, GDP growth rates may show a falling trend from high to low throughout the year of 2021. However, this will only be the appearance of statistics. For each quarter, we expect GDP growth to be relatively stable compared to the previous quarter.

Third, we have taken into account the need to sustain healthy economic growth. When we set the expected GDP growth target for 2021, we need to take into account both the economic situation of this year and that of the next two years. The expected target should be well-aligned with the annual goals of subsequent years, so as to maintain long-term and steady economic development. Thank you.

ThePaper.cn:

It is mentioned in the work report that the consumer price index (CPI) will rise by around 3% this year, followed by a steady increase in people's income. Can you explain how the steady increase in income will be achieved and to what extent our income will have to increase in order to catch up with the 3% increase in consumer prices? Thank you.

Sun Guojun:

Thank you for your questions. The CPI is directly related to everyone's daily life, and affects the basic wellbeing of the people. Keeping the CPI generally stable is an important objective of macroeconomic regulation and control, and an important sign that economic operation remains within a reasonable range. Last year, China's CPI rose by 2.5%, which was significantly lower than the expected target of around 3.5%.

This year, taking into account the carry-over effects and new price increases, the expected target for the rise in the CPI was set at around 3%, a downward adjustment from last year's expected target, indicating that the Chinese government is confident that the CPI will be controlled at a relatively low level. Food prices account for a high percentage of the CPI. In recent years, China has scored consecutive bumper harvests, so the supply of agricultural products has been guaranteed. This, coupled with the basic recovery of hog production capacity, is conducive to keeping prices stable.

This year's government report sets a target of steady growth in personal income. To increase people's income, the prerequisite is to achieve relatively full employment and strive to keep the growth of people's income basically in line with economic growth. At the same time, efforts should be made to raise the incomes of low-income groups, expand middle-income groups and promote common prosperity. Thank you.

China News Service:

The government work report said that China has achieved a major strategic success in the fight against COVID-19. Could you elaborate on our achievements? What should be done next? Thank you.

Guo Wei:

COVID-19 is the most serious global pandemic seen for nearly a century. After the outbreak, the CPC Central Committee with Comrade Xi Jinping at its core made epidemic prevention and control the top priority. General Secretary Xi Jinping gave immediate instructions, took charge of the COVID-19 response, made people's lives and health the first priority, and adopted resolute measures in the battle against the novel coronavirus. Premier Li Keqiang chaired multiple meetings of the Central Leading Group for Novel Coronavirus Prevention and Control and made specific arrangements. Thanks to the resolute decisions made by the CPC Central Committee, the coordination of different localities and departments, and through the concerted efforts of the Chinese people, we achieved a major success in our response to COVID-19. In around a month, the fast spread of the virus was contained; in around two months, the daily increase of domestic coronavirus cases had fallen to single digits; and in approximately three months, a decisive victory was secured in the battle to defend Hubei province and its capital city Wuhan. In response to evolving epidemic dynamics, we made timely adjustments to our response approaches. We improved routine control mechanisms, reopened the economy and resumed normal life in low-risk areas, suppressed several regional outbreaks of the epidemic, and consolidated our achievements in controlling COVID-19.

We have withstood the test of COVID-19 and protected the health and safety of the Chinese people. More importantly, after the epidemic, Chinese people of all ethnic groups are more united as one, more patriotic, and more confident in the vitality and advantage of our national system and our state governance system, which will bring long-lasting effects to our future development.

As the pandemic continues around the world, the government work report has made arrangements for the next step under the requirements of the CPC Central Committee on epidemic prevention and control as well as socioeconomic development. It stresses a more coordinated way to carry out COVID-19 prevention and control and pursue socioeconomic development. I think, first, we're going to improve our routine prevention and control measures and boost our capacity with science-based precise measures. We will minimize the impact of our COVID-19 response on our work and life, increase testing for high-risk personnel and areas, and identify risks in a timely fashion. Second, we will increase our emergency response ability. We should ensure readiness and supply so that, in case of sudden outbreaks, we can identify control zones, and conduct COVID-19 testing, contact tracing and carry out medical treatment. Of course, we need to avoid a one-size-fits-all approach and imposing extra requirements in the name of epidemic control. Third, we will continue to promote vaccine research and its free roll-out. Currently, we have conditionally approved four COVID-19 vaccines for public use. In the next step, we will continue to intensify our efforts in R&D, improve vaccine production and supply, step up supervision of the supply chain, standardize vaccination procedures, and ensure the quality of the vaccine as well as safe vaccination. At the same time, we will continuously monitor and study mutant COVID-19 strains, and speed up our R&D of drugs and treatment, in order to increase our capacity for treating COVID-19.

Phoenix TV:

We noticed the report mentioned that the government formulated and implemented macro policies to meet the urgent needs of market entities. What's the rationale behind that? Thank you.

Sun Guojun:

Thank you for your question, which is a question that particularly captures the key point. Facing the shocks of a severity rarely seen before, the CPC Central Committee pledged to coordinate the COVID-19 response with socioeconomic development, and adopt macro policies to minimize the impact of the pandemic. We carried out the task of maintaining security and stability in six key areas -- particularly job security, basic living needs, and the operations of market entities. We also maintained security in industrial and supply chains, food and energy, and the smooth functioning of grassroots government at the macro level. Our goals were maintaining security by keeping stability while pursuing progress, holding the bottom line and keeping the fundamentals of the employment and economy. Our goals last year were specific and clear. As is clearly stated in the government work report, we gave top priority to stabilizing employment and ensuring living standards, made decisive progress in the battle against poverty, and achieved our goals in building a moderately prosperous society in all respects.

How can we keep the bottom line and fulfil the task of "maintaining security in six key areas"? This requires a targeted approach based on the characteristics of the epidemic shock and the actual situation of the country. Unlike previous economic and financial crises, the epidemic directly hit the consumer side of the economy and a large number of micro-, small and medium-sized enterprises (MSMEs) and self-employed individuals. China has more than 30 million MSMEs and 90 million self-employed individuals, which support many of the 440 million urban employees and 290 million migrant workers. MSMEs and self-employed individuals are less risk-resilient market entities. We have to give priority to stabilizing employment and protecting people's livelihood. The policies we have implemented revolve around market entities, with the focus placed on helping less risk-resilient entities overcome difficulties. If there are problems with market entities and employment, there will be problems with people's livelihood. This includes tax cuts and fee reductions of more than 2.6 trillion yuan, including 1.7 trillion yuan in social insurance premium cuts and exemptions, mainly benefiting MSMEs. It also includes more than 7 trillion yuan in deferred principal and interest repayments on loans to MSMEs, as well as concessions from the financial system and a significant increase in loans from large commercial banks for the benefit of MSMEs. As last year's government work report mentioned, market entities must be able to sustain themselves and assure success for the future. We have helped to sustain market entities, which has laid a solid foundation not only for maintaining stable employment and meeting basic living needs, but also for economic recovery. 

In terms of actual results, our employment and economic growth indicators were better than expected last year, and we achieved greater results at a reasonable cost. Thank you.

21st Century Business Herald:

My question is, the three-year campaign to prevent and resolve financial risks in 2020 has concluded, so how can we evaluate the results of this three-year campaign? Is the financial risk mitigation going to be a protracted battle? Thank you.

Sun Guojun:

Preventing systemic financial risks remains the permanent task of financial work, which is the same worldwide. The CPC Central Committee and the State Council have attached great importance to that. The Party's 19th National Congress has made forestalling and defusing major risks as one of the three critical battles, and preventing and resolving financial risks is an important aspect of it. Through concentrated efforts, a number of major risks have been effectively dealt with, important milestones have been achieved in the disposal of financial risks, financial risks have tended to shrink and are generally controllable, the financial order has improved significantly, and financial operations are more robust.

Meanwhile, we must also see that the current domestic and international economic and financial situation is complex and volatile, and the financial sector is still facing many risks and challenges. We should remain mindful of worst-case scenarios and make unremitting efforts to prevent and control all kinds of financial risks. 

First, we will improve the mechanism for managing financial risks, and see that responsibilities are fulfilled by all the stakeholders, including financial institutions and their shareholders, local governments and financial regulators. 

Second, we will focus on preventing and resolving the risks of small and medium-sized financial institutions, replenishing the capital of small and medium-sized banks through multiple channels and strengthening corporate governance.

Third, we need to improve laws and regulations governing the bond market and properly handle the debt default risks of enterprises. 

Fourth, we will continue to resolve existing risks, improve our ability to anticipate and foresee, prevent incremental risks, closely prevent and control external imported risks, improve the long-term mechanism for risk disposal, and resolutely guard against systemic risks. Thank you.

Shenzhen TV:

We have noticed that the new FYP has dedicated a whole chapter to science and technology for the first time, emphasizing that technological self-reliance is the main pillar for China to develop its economy. What are the measures to be taken to realize technological self-reliance? Thank you.

Guo Wei:

The fifth plenary session of the 19th CPC Central Committee pointed out that we should make innovation the core of our modernization campaign, make scientific and technological self-reliance and self-improvement a strategic support for national development, and accelerate the development of science and technology.

Improving our technological and innovative ability is a systematic program and requires long-term work. This year's government work report underlines three aspects. 

First, we need to strengthen national strategic science and technology forces, including the construction of national laboratories, make good use of existing national science and technology resources, optimize the allocation of science and technology forces, and strengthen core technology research and development.

Second, we should strengthen basic research, which is emphasized in this year's government work report. Basic research requires much time and down-to-earth work. Therefore, we should have the spirit of "the blacksmiths of the past who would spend years forging the perfect sword," and create conditions for scientists to continue their hard work. To enhance basic research, we have a series of policies, including expanding investment in basic research, and improving the assessment and incentive mechanisms of technological results. 

Third, we will leverage market forces to encourage the enterprises to increase R&D investment. The government work report proposes an important policy, which is raising the extra tax deduction on manufacturing enterprises' R&D costs from 75% to 100%. That means enterprises can enjoy double deduction on R&D expenditure and are eligible for more income tax deductions. That is a great boost for enterprises to increase R&D spending.

Certainly, China's technological development must rely on international technological cooperation, which is what we have constantly upheld in the past. Looking forward, we will strengthen international cooperation on science and technology, and let technological development benefit the common well-being of humanity. Thank you.

Beijing Youth Daily:

Under the impact of the COVID-19 epidemic, some macroeconomic policies introduced in the government work report last year were called unusual measures in unusual times. This year, we are carrying out regular epidemic controls, so what are your considerations in adjusting the macroeconomic policies? Thank you.

Sun Guojun:

Thank you for your question. The macro policies last year were formulated and implemented to meet the urgent needs of market entities. In terms of the targets and focuses of the macro policies this year, the Central Economic Work Conference held at the end of last year made clear plans for this year's economic work. The government work report implemented the guiding principles from the Central Economic Work Conference and made specific plans for macro policies. Generally speaking, we should ensure the continuity, consistency, and sustainability of macro policies this year, continue with and optimize the policy logic and focuses of last year, maintain necessary policy support, and avoid sharp turns in policy, so as to continue to ensure macro policies alleviate the difficulties of market entities.

This can be reflected in several aspects. For example, central and provincial-level governments will further increase funding allocations to prefecture- and county-level governments to assist local businesses and residents. The government work report highlights two notable increases. First is that the general transfer payments from the central government to local governments will be raised by 7.8% — which marks a significant increase over last year — while continued cuts will be made in central government expenditures. Second is the increased efforts to ensure employment, living standards and the operation of market entities at the grassroots level. This year, 2.8 trillion yuan of central government funding will be placed under the mechanism of directly allocating budgetary funds to prefecture- and county-level governments, meaning that financial resources will reach local governments more quickly. This year's government work report introduces many practical measures to ease the burden of market entities. Regarding tax cuts, for instance, we will continue to implement systematic tax cut policies, adjust and improve the temporary tax cut policies adopted last year, and extend the duration of some temporary policies. Meanwhile, we have introduced new policies for MSMEs, and policies granting extra tax deductions on R&D costs to encourage innovation. In addition, we will raise the VAT threshold for small-scale taxpayers from 100,000 yuan to 150,000 yuan in monthly sales, and halve the income tax of small and micro enterprises on annual taxable income below 1 million yuan, which are big discounts.

As for reducing enterprises' production and operating costs, we will cut the electricity rates for general industrial and commercial businesses, take firm measures to rectify irregular height and width limits and checkpoints that affect freight transportation, and lower the average broadband rates for small and medium-sized enterprises by an additional 10%. Many policies are aimed at MSMEs and self-employed individuals, which although they have seen improved operations, still face many difficulties. We need to provide more policy assistance to help them stand firm and achieve greater development. Thank you.

Cover News:

Last year, 11.86 million new urban jobs were added in China, far exceeding the target set in last year's government work report. We've noticed that the target for this year is to create more than 11 million new urban jobs. How was the target set? And, is there some leeway in this employment target? Thank you.

Guo Wei:

Because of the COVID-19 epidemic and other serious shocks, employment faced particularly grave challenges last year. As mentioned before, in the first quarter of last year, China's economy shrank by 6.8% year on year. The government work report last year set a target of creating more than 9 million urban jobs, which was actually rather demanding, given the situation at the time. In order to achieve this goal, the CPC Central Committee and the State Council gave high priority to ensuring stable employment, and stepped up efforts to ensure employment, people's livelihood and market entities. In fact, ensuring market entities also helps ensure employment. Local governments and relevant departments have also proposed many ideas and introduced various policies to stabilize employment. As the economy recovered and policies yielded results, employment gradually recovered. Last year, 11.86 million new urban jobs were created, exceeding the target set in the government work report, and no large-scale unemployment occurred. This was not an easy task.

Employment still faces great pressure this year. Around 15 million new urban jobs need to be created, including those for over 9 million college graduates. The government work report, in accordance with the decisions and arrangements of the CPC Central Committee, continues to prioritize ensuring employment, and clearly states that improvements should continue to be made to the employment-first policy to enhance its performance. Based on the employment demand and economic recovery trend, the report sets the employment target at 11 million new urban jobs — the same as 2019 — and surveyed urban unemployment rate at about 5.5%. The economy is still recovering, market conditions are still complex and serious, and uncertainties are still on the rise. Under such circumstances, the targets are not easy to meet and greater efforts are required to do so. Thank you.

Shangyou News:

The government work report is an annual guiding document for the exercise of government power. How did the drafting of the report respond to the concerns of the whole society and listen to and incorporate the views of various sectors of the society? Thank you.

Sun Guojun: 

Thank you for your question. In accordance with General Secretary Xi Jinping's requirement on soliciting public opinions in an open way, we pay great attention to the public's concerns and fully understand the opinions of people from all walks of life while drafting the government work report. The drafting process of the report was a process of gathering the wisdom of the people and pooling their efforts, as well as a process of planning specific policy measures, which was also introduced in the opening speech earlier.

Premier Li Keqiang collected views and suggestions by presiding over a number of symposiums, attended by representatives from non-communist political parties, chambers of commerce, public figures without party affiliation, experts and entrepreneurs, and representatives from the education, science and technology, culture, health, and sports sectors, as well as members of the public. Premier Li also solicited opinions by convening symposiums to analyze the economic situation. We were able to sort out 48 specific suggestions from the symposium attended by representatives from non-communist political parties, chambers of commerce and public figures without party affiliation.

We also extensively solicited suggestions from all localities and departments. After deliberation at the plenary meeting of the State Council, the revision of the drafted report was printed and distributed in accordance with due procedures to all localities, central departments in the Party, the government, the military, and people's organizations and some enterprises. Another thousand suggestions were then collected after this large-scale soliciting of views and suggestions.

In addition, we also collected opinions via media platforms. The event "Share your ideas with China's premier" was launched on www.gov.cn for the seventh year to solicit netizens' opinions by joining hands with 21 online media platforms. The event classified 22 topics and received nearly 1 million suggestions. After sifting through the comments, www.gov.cn submitted more than 1,200 representative views to the drafting team.

Meanwhile, during the drafting of the report, we paid great attention to social concerns and hot issues, and organized investigations into the prominent issues most concerned by the public so as to propose policy recommendations accordingly.

Generally speaking, despite the impact of the COVID-19 pandemic, we still adopted all possible methods to make sure the report reflects the true concerns of the public. Thank you.

Guo Wei:

I'd like to add that the proposals and suggestions reflected in the report are not limited to those collected during the drafting process. This year's report has implemented the guiding principles of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, making detailed arrangements for the 14th Five-Year Plan period and clear requirements for the work ahead. Actually, the process of formulating the documents of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference was a process of soliciting opinions widely. General Secretary Xi Jinping extensively took in views and suggestions by presiding over meetings of relevant departments, localities, and professional fields, and held a series of special symposiums before the two abovementioned meetings. The documents of the two meetings had gone through repeated opinion-soliciting before the formal versions were presented.

This year's report was drafted in accordance with the decisions of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, and fully reflects people's desires and their wisdom after soliciting extensive opinions from people of all walks of life. The drafting process can guarantee that we uphold the leadership of the CPC in the economic and social development of our country, and ensure that various measures are implemented following the people-centered development philosophy, and ensure that the government makes decisions in a sound, democratic and effective way. We can see significant institutional strengths from the drafting process of the report. Thank you.

Yicai:

The Report on the Work of the Government proposes to pursue a higher-standard of opening up. Will the opening of the financial market and capital accounts, as well as RMB internationalization remain your focus this year? What other measures will you take, and will the pace of opening up be changed? Thank you.

Sun Guojun:

Thank you for your question. According to the fifth plenary session of the 19th CPC Central Committee, China will advance the internationalization of its RMB through prudent measures, adhere to market-driven policies and enterprises' independent choices, and build a new mutually beneficial and cooperative relationship based on the internationalization and free use of the RMB.

In recent years, China has taken steady steps to realize capital account convertibility and RMB internationalization and actively develop the open economy. At present, direct investment has opened relatively high, investment channels of cross-border securities have expanded, and restrictions on cross-border financing have significantly eased. Cross-border use of the RMB has continuously increased, and RMB assets have become more attractive. According to the IMF's latest data, the RMB is already the world's fifth-largest official reserve currency.

Next, we will implement the guiding principle of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, steadily promote the orderly opening of capital accounts, and take prudent measures to advance the internationalization of the RMB. Specifically speaking, we will serve the real economy, accelerate trade and investment liberalization and facilitation, optimize relevant policies on the use of the RMB, and strengthen infrastructure for RMB internationalization. We will pursue a high-quality and two-way opening of financial markets, facilitate an orderly two-way flow of cross-border capital, and foster the sound and coordinated development of domestic and foreign currencies as well as offshore and onshore markets. Thank you.

Red Star News:

Last year, the Chinese government released a series of policies to ensure stability on six fronts and security in six areas. What feedbacks did you receive from small and medium-sized enterprises when preparing the Report on the Work of the Government? How did those policies help them and what supporting policies, including policies regarding the alleviation of financial burden among MSMEs, will be extended this year? Thank you.

Sun Guojun:

I have mentioned this previously when answering questions regarding last year's macro policies and this year's policy focuses. Please let me add a couple of things. Last year, the difficulties rarely seen in history directly impacted Chinese MSMEs, as well as self-employed individuals, creating significant pressure. The macro policies of the central government helped them overcome these difficulties. Local authorities carried out a series of flexible policies according to practical needs, including reducing and waiving house rent to support MSMEs, as well as self-employed individuals. A sentence in the Report on the Work of the Government says, "Market entities, over one hundred million in number, responded to shocks with fortitude and resilience." All businesses have paid a lot; many of them didn't cut jobs, or only cut a small number of jobs, and made it through together with their employees. Last year was truly challenging both for the whole country and for every market entity. 

This year, in accordance with the deployment of the CPC Central Committee, we will continue to help market entities solve difficulties. Fiscal and monetary policies, and policies on employment and even reform all aim to stimulate business vitality, improve business environment, and provide further support to MSMEs, as well as self-employed individuals. Thank you.

Shou Xiaoli:

Thank you to our speakers, and also to all the friends of the press. That's all for today's press conference. Goodbye, everyone.

Translated and edited by Yang Xi, Li Xiao, Wang Qian, Zhu Bochen, He Shan, Liu Jianing, Lin Liyao, Fan Junmei, Zhang Tingting, Huang Shan, Xu Xiaoxuan, Li Huiru, Guo Yiming, Liu Sitong, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission

Zhao Huan, chairman of China Development Bank

Gu Shu, chairman of the Agricultural Bank of China

Luo Xi, chairman of the People's Insurance Company of China

Song Shuguang, chairman of China Export & Credit Insurance Corporation

Chairperson: 

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date: 

March 2, 2021

Shou Xiaoli:

Good morning, ladies and gentlemen. Welcome to the press conference of the State Council Information Office. The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) made it clear that China will promote high-quality development. The high-quality development of the banking and insurance sectors is of great significance in achieving high-quality economic and social development. Today, we are pleased to invite Mr. Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, to brief you on issues regarding promoting the high-quality development of the banking and insurance sectors, and field questions. We also have with us Mr. Zhao Huan, chairman of China Development Bank; Mr. Gu Shu, chairman of the Agricultural Bank of China; Mr. Luo Xi, chairman of the People's Insurance Company of China; and Mr. Song Shuguang, chairman of China Export & Credit Insurance Corporation. Next, I will give the floor to Mr. Guo. 

Guo Shuqing:

Thank you. Ladies and gentlemen, comrades and friends, good morning. First of all, on behalf of the China Banking and Insurance Regulatory Commission (CBIRC), and all the chairmen present at today's press conference, I would like to express my sincere gratitude to friends from the media who have been supporting the reform and development of the banking and insurance sectors for a long time. I hope you all enjoyed the Chinese New Year and are doing well.

Faced with the severe and complex domestic and international situations in 2020, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the CBIRC and the entire banking and insurance sectors resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council. We have been enhancing the Party's political building as the overarching principle; strengthening our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership; staying confident in the path, theory, system, and culture of socialism with Chinese characteristics; upholding General Secretary Xi Jinping's core position on the CPC Central Committee and in the CPC as a whole, and upholding the CPC Central Committee's authority and its centralized and unified leadership. Under the command of the Financial Stability and Development Committee of the State Council, we have risen to the challenges and acted proactively, remained committed to the general principle of pursuing progress while ensuring stability, pursued supply-side structural reform as our main task, resolutely worked to win the battle to forestall and defuse financial risks, and strived to advance the modernization of the financial governance system and capabilities. Solid progress has been made in various tasks. 

First, we have contributed to the rapid recovery of the national economy which shifted from stagnation or decline to normal growth. Since the COVID-19 outbreak began, we have put people and life first and immediately formulated a series of policies and measures to ensure an overall victory in the battle against the virus, including issuing a total of 5.3 trillion yuan in special emergency credit bonds and completing relevant insurance payments of more than 500 million yuan. By the end of 2020, outstanding RMB loans rose by 19.6 trillion yuan from the beginning of the year, and we extended the repayment of principal and interest on loans of 6.6 trillion yuan in total. Emergency loans of 24.27 billion yuan were issued in five pilot provinces and cities. We have achieved the target of making interest concessions of 1.5 trillion yuan to boost the real economy throughout the year. Our actions have strongly supported the resumption of work and production, helping to ensure stability on the six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations), and maintain security in the six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government). Manufacturing loans increased by 2.2 trillion yuan throughout the year, exceeding the total of the previous five years; 5.7 trillion yuan flowed into private enterprises, up 1.5 trillion yuan over the previous year; and health insurance spending stood at 292.1 billion yuan, a year-on-year increase of 24.2%. We have kept 1.57 trillion yuan as long-term health protection reserves stashed away against future risks. We also actively helped win the battle against poverty. Over the past three years, a total of 9.2 trillion yuan of targeted poverty alleviation loans have been issued nationwide, and a total of 3.5 trillion yuan has been provided via agricultural poverty alleviation insurance. We have actively participated in the battle against pollution, and the green credit balance of 21 major banks stood at 11.5 trillion yuan by the end of 2020.

Second, digital transformation contributed to the development of inclusive finance. The banking and insurance sectors have accelerated product and service innovation to promote the transformation and upgrading of the national economy. According to reports from relevant international organizations, China's inclusive financial services have met international standards, with electronic payments, digital credit and online insurance leading the world. In 2020, banking institutions and insurance institutions invested a total of 207.8 billion and 35.1 billion yuan in information technology respectively, representing year-on-year increases of 20% and 27%. The five largest banks have established special fintech companies, which has significantly enhanced the availability and convenience of financial services. For example, giving full play to its advantages in technology and data, China Construction Bank implemented process re-engineering to facilitate lending to small and micro enterprises. It also established a "quick loans for micro and small enterprises" online business model, and innovated a series of exclusive service solutions for inclusive finance. At the end of 2020, the national inclusive loans to small and micro enterprises stood at 15.3 trillion yuan, with a growth rate of over 30%. For the five largest banks, growth was 54.8%. Basic financial services have been extended to all administrative villages. The serious disease insurance scheme has covered 1.13 billion urban and rural residents.

Third, decisive achievements have been made in the battle to forestall and defuse financial risks. As regards the tasks and requirements put forward by General Secretary Xi Jinping at the Central Economic Work Conference at the end of 2016 and the 2017 National Financial Work Conference, risks to the banking and insurance sectors have been gradually constrained, and several major potential pitfalls and problems have been avoided. We have held the bottom line and fended off systemic risks. First, the financial leverage ratio has dropped significantly, and the blind expansion of financial assets has been fundamentally curbed. From 2017 to 2020, the average annual growth rates of total assets in the banking and insurance sectors were 8.3% and 11.4%, respectively, roughly half of the average annual growth rate from 2009 to 2016. The proportion of interbank assets idling within the financial system has also dropped significantly. Second, solid progress has been made in the identification and disposal of non-performing assets in the banking industry. We disposed of 8.8 trillion yuan of non-performing loans from 2017 to 2020, exceeding the total of the previous 12 years. Third, shadow banking has been dismantled in an orderly manner, dropping by about 20 trillion yuan from its historical peak. Fourth, financial crimes have been severely punished and the risks of illegal financial groups have been gradually defused. A large number of illegal fundraising cases have been dealt with in an orderly manner, and online financial risks have been well addressed. Fifth, with timely and effective response to external risks, we ensured that the financial system maintained strong resilience. Sixth, the financialization and bubbles in real estate have been curbed. The growth rate of real estate loans in 2020 was lower than that of various other loans for the first time in eight years. Seventh, the incremental risk over the hidden debt of local governments has been basically controlled, and we have been pressing ahead with the resolution of existing risks in an orderly manner. Eighth, the debt risks of large- and medium-sized enterprises have been handled steadily. By the end of 2020, a total of 20,000 creditors' committees had been established nationwide; the country had implemented 1.6 trillion yuan in debt-to-equity swaps according to market-oriented and law-based rule, and more than 500 large- and medium-sized enterprises had implemented joint credit granting pilot projects.

Fourth, we have fostered a positive atmosphere of strict supervision and regulation. Through unswervingly enforcing full and strict discipline over the Party and combating corruption in the financial sector, we have strengthened supervision and enforced discipline. A batch of corrupt officials who colluded with businessmen and committed embezzlement have been brought to justice. We have rigorously implemented regulations relating to separation between public and private interests, and assignment avoidance, and have increased supervision and accountability. A total of 164 people working in the banking and insurance regulatory sector received disciplinary punishment in 2020. We have accelerated supervision improvement and plugged loopholes in the system. A total of 61 items of supervision rules were completed in 2020. We have addressed disorder with severe punishment and maintained a tough position on violation punishment and accountability. We punished 3,178 banks and insurance institutions for violating laws and regulations, penalized 4,554 liable persons and confiscated a total of 2.28 billion yuan in 2020. We have resolved financial disputes through multiple means. We repaid and compensated 17.7 billion yuan to consumers, thus guaranteeing the legitimate rights and interests of financial consumers. 

Fifth, the corporate governance of banks and insurance institutions with Chinese characteristics has improved step by step. We treated enhancing corporate governance as a focal point in transforming the systems and mechanisms of banks and insurance institutions. Following the consensus reached at the 2016 Hangzhou G20 Summit, we endeavored to carry out effective implementation of the G20/OECD Principles of Corporate Governance and urged to integrate the leadership of the Party into corporate governance. We should guarantee the Party's role at the core of leadership through mechanisms like cross appointment and integrating intra-Party supervision into corporate regulations. Banks and insurance institutions have established organizational structures containing shareholders meetings, boards of directors, board of supervisors and senior management. We have strengthened the penetrating supervision of major shareholders and conducted rectification work on related-party transactions. Currently, China's commercial banking system has been optimized with sufficient market competition. The operational efficiency of China's four large-scale commercial banks has approached the advanced level of international counterparts and overtaken many others in aspects like labor productivity, cost-income ratio, profitability, and scientific and technological innovation. The large-scale insurance companies have sufficient capital, being well-matched with counterparts in the U.S., Europe and Japan. 

Sixth, the reform and opening up in the banking and insurance sectors keeps deepening. We have deepened reform of small and medium-sized banks and steadily improved their ability to ward off risks. Specific local government bonds totaling 200 billion yuan have been issued to increase the capital supply for small and medium-sized banks. We have deepened reforms on using of insurance funds and pricing mechanisms for commercial vehicle and accident insurance; promoted commercial pension schemes reform and health insurance development; channeled long-term funds, such as wealth management products, insurance and trust assets into supporting capital market development. We have continuously advanced opening-up measures and achieved desirable effects. We have given approval to foreign banks and insurers to set up more than 100 institutions in China since 2018. Some leading international institutions in wealth management, commercial insurance, credit rating and other fields have entered the Chinese market by means of establishing wholly foreign-owned institutions, holding controlling stakes and holding shares. Foreign institutions have become much more enthusiastic to make investments in Chinese financial market. 

The year 2021 is the first year of China's 14th Five-Year Plan period. CBIRC will stick to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; implement the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference held in December; promote fostering of a new development paradigm by making breakthroughs in high-quality development of banking and insurance sectors. We will make efforts in the following aspects: first, we will improve systems and mechanisms facilitating financial institutions to support the real economy efficiently and provide targeted support to key areas and key industries, including those conducive to China's self-reliance in science and technology, advanced manufacturing, private enterprises, small and micro businesses, rural vitalization and green development. Second, we will deepen the supply-side structural reform in financial sector, and adopt the customer-centered and market-oriented philosophy, incubate more professionally-competent and specialized financial institutions, develop more banking products to meet people's needs, and advance the regulated development of the commercial endowment insurance - the third pillar in China's three pillar pension system and other insurance services. Third, we will treat risk prevention as the eternal theme of the financial sector. There will be no let-up in our efforts to monitor and defuse various financial risks, strengthen the rule of law in the sector, and improve long-term mechanisms in this regard. Fourth, we will maintain a fair market environment, reinforce anti-monopoly and prevent capital from expanding in a disorderly fashion, and guarantee financial innovation is conducted under prudent supervision. Fifth, we will carry out deeper reforms of the financial market and institutions, advance financial opening-up to a higher-level, facilitate flows of relevant factors, and invigorate market vitality. Sixth, we will stick to comprehensively enforcing strict Party self-governance and fight corruption in the financial sector, strengthen internal management and self-improvement, and cultivate a supervision team who are loyal to the Party and people, have moral integrity, and demonstrate a keen sense of responsibility. Through our earnest efforts, we will do solid work and realize a good start in the beginning of the 14th Five-Year Plan period and celebrate the CPC's centenary with remarkable achievements. 

That's all for my introduction. Now, my colleagues and I are willing to answer your questions. Thank you. 

Shou Xiaoli:

Thank you, Mr. Guo. The floor is open for questions. Please identify your news outlet before asking question. Thank you.

CCTV:

My question is for Mr. Guo. Last year was the concluding year of the campaign of preventing and defusing financial risks. My question is, what key progress has we made over the past three years? What's the next step of financial risk prevention and control? You have pointed out that real estate has become the most daunting "grey rhino" among China's financial risks, so what's your opinion on the current risk in this regard? Are there new measures to be rolled out this year? All the banks have accelerated digitalized transformation over the past two years. My question is, what kind of challenges has digitalization brought on supervision? What kind of risks should we focus on during the process? Thank you. 

Guo Shuqing:

Thank you. Your questions are all very good, but actually you put forward seven or eight ones. I can not take up too much time, and will answer them briefly and give more chances to other reporters and my colleagues. 

To prevent and defuse financial risks, the top priority for banking and insurance industries is to follow the requirements of the CPC Central Committee and cut high leverage in the financial system. The financial system witnessed a long period of rapid growth. Then between 2017 and 2020, the annual average growth rate of the total assets in the banking and insurance industries dropped to relatively low levels, with that of the banking sector down to 8.3%, and the insurance sector down to 11.4%, roughly half the growth rates between 2009 and 2016. The share of interbank assets circulating within the financial sector without entering into the real economy has decreased noticeably. This is a remarkable achievement and is also crucial for the banking and financial systems to run in a smooth manner and keep financial risks under control.  

Moreover, the banking sector has stepped up efforts to dispose of non-performing assets. Disposal of non-performing loans in the banking sector over the past four years, which was mentioned just now, equals the same amount as the previous 12 years combined. 

Third, the "shadow banking" sector has been dismantled in an orderly manner. The "shadow banking" industry was large in the past and the essence of the shadow banking business such as investment, wealth management, or peer-to-peer lending is credit. It provides credit business like banks but operates outside banking regulations. For example, a bank must maintain enough capital but these [shadow banking] platforms operate without being subject to any requirement for capital, regulations, or market restraints, which will consequently lead to serious problems. The shadow banking sector has contracted by about 20 trillion yuan, which makes the overall financial system healthier and more stable.  

Moreover, financial crimes have been severely punished and risks of illegal financial groups have been gradually defused, with a large number of illegal fundraising cases being dealt with in an orderly manner. Sound progress has been made in these areas.

Regarding the housing issue that you asked about, I would like to say that the risk of a real estate bubble and financialization of the sector is still acute. However, last year, the growth rate in the number of loans channeled into the real estate sector has, for the very first time, dropped to a level lower than the average growth rate of credit. This is a hard-won achievement. We are confident that problems in the real estate sector will be solved gradually. We are ramping up efforts to put a series of measures in place. Some of you may have noticed that many cities have rolled out city-specific real estate control policies to keep land prices, housing prices, and market expectation stable and ensure that housing problems will be tackled step by step. As I also mentioned, the problem of "the gray rhino," i.e. people buy homes not for living in but for investment or speculation, is very dangerous. By owning so many properties, they stand the chance of suffering huge losses in terms of personal assets once the property market goes down. Moreover, they may not be able to repay their mortgage loans and banks may not be able to take back loan principles and interest accordingly, which will lead to economic chaos. Therefore, it is necessary for us to promote the steady and healthy development of the real estate market in a proactive and prudent manner. Thank you.

MNI:

Compared with major Western economies, China has taken the lead in normalizing its policy, especially its monetary policy. What impact will the difference in policy pace between China and other countries have on China's policy and its market? Many are concerned that capital inflows and asset bubbles could lead to imported inflation. Do you see any reason for such concern? Thank you.

Guo Shuqing:

This is a really good question, and many others also have the same concern. The COVID-19 pandemic has represented a shock for the world's economy which is generally in a downward spiral. China experienced economic headwinds last year with its economy hit hardest in the first and second quarters. In the third and fourth quarters, China's economy began to return to normal but the annual economic growth rate dropped significantly compared to that of the previous years. Developed European and American countries, countries that are severely affected by the pandemic, and some developing countries all adopted proactive fiscal policies and ultra-loose monetary policies. We understand these macroeconomic policies are necessary for stabilizing the economy but we should take more consideration of the force and consequences of these measures, which have side effects that have started to show gradually. First, the financial markets are trading at high levels in Europe, the U.S. and other developed countries, which runs counter to the real economy. The financial market should be a reflection of the real economy. Problems will occur if the performance of the financial market and real economy become too different, and the financial markets will be forced to make adjustments sooner or later. So we are worried about the financial market, especially the possibility that foreign financial asset bubbles may burst one day.

Second, China's economy is closely intertwined with other countries as the economy has become highly globalized. After the increase in liquidity, the volume of foreign capital that flows into China will increase noticeably, which has been the case. China's economy is still recovering, and the prices of assets are appealing, with a larger interest rate spread compared with that of other countries. In this regard, it is inevitable to see foreign capital inflows. For now, the size and speed of foreign capital inflows remain controllable. On the one hand, we have been studying how to put more effective measures in place to encourage cross-border capital flows at an increasingly open level, while not causing huge fluctuations in the domestic financial market on the other hand. We are confident that we are able to do the job well.

CRI:

The pandemic spread across the globe in 2020. Foreign trade companies are facing severe difficulties due to a sharp decline in global trade. What measures have been adopted in the banking and insurance industries to support the resumption of work and production, and stabilize the overall performance of foreign trade? Thank you.

Guo Shuqing:

Our export situation was better than expected last year. Due to the global economic slowdown, there was no sharp decline in demand for China's products compared to previous years. Some countries even increase their imports from China. So our export situation is quite good. We've rarely seen such a big surplus in trade, which is inconsistent with the trends of the previous years, and this was aided by the special situation. Concerning this, my colleague Mr. Song, who is proficient in export credit insurance, may understand the situation better.

Song Shuguang:

Since the outbreak of COVID-19 early last year, General Secretary Xi Jinping has underscored the vital role of export credit insurance on three occasions. Over the past year, SINOSURE has fully implemented the guiding principles of General Secretary Xi's remarks as well as the decisions of the CPC Central Committee and the State Council. Under the guidance of CBIRC and other relevant departments, our company has actively enforced policies and made contributions to ensure stability on six fronts and security in six areas. During the initial outbreak, we rolled out ten measures to address the urgent need to import medical supplies in the fight against COVID-19. We also published 23 phased and extraordinary measures to ensure stability in foreign trade, increasing our support in six aspects that covered underwriting, compensation, and service. The work has delivered positive results, and progressed as follows:

First, we further increased the coverage of export credit insurance. In light of growing external risks, we carried out active underwriting policies. Last year, SINOSURE underwrote over US$700 billion worth of insured businesses, up 15% year on year, and much higher than the export growth rate. We supported exports worth US$580 billion, accounting for 22% of the total volume of exports — much higher than the average global growth. Last year, we served 147,000 clients, including more than 40,000 new clients, up by 58%, which maintained around 15 million export-related jobs. 

Second, we gave firm support to our clients in major markets and industries. SINOSURE has actively promoted progress made at the Belt and Road Forum for International Cooperation and strengthened the cooperation of the third-party market. Last year, our company fully supported exports and investments to countries along the Belt and Road, with a combined business volume of over US$150 billion. SINOSURE has underwritten more insured businesses with the U.S., supporting exports to the U.S. worth over US$50 billion, up by 13%. We also formulated tailored underwriting policies for electronic information and home appliance industries, giving priority to protecting leading companies with global influence and key links, to better serve the smooth operation of industrial chains and supply chains. Last year, we supported the trade volume of the electronic information industry, which exceeded US$100 billion, up by 23%. As for the risks resulting from canceling orders or refusing to accept goods and to pay, our company increased support to guarantee sales for companies before the export, underwriting 3.4 times more than the year before in this insured business .

Third, we effectively mitigated difficulties faced by companies in accessing financing. We combined the export credit insurance risk management mechanism with the financing services of banks. The major works fall into three aspects. First, our company worked together with 167 domestic and foreign banks to provide premium financing services for foreign trade enterprises as well as tailored products. For example, we worked together to roll out the Credit Insurance Financing project to provide premium financing services for micro and small-sized companies. The service offered affordable interest rates and gives companies access to financing through an online review process without requiring a mortgage. Second, our company utilized refinancing and interest subsidy policies. Some of our funds were allocated to micro and small-sized foreign trade companies, which delivered positive results, especially in Jiangsu, Zhejiang, and Shanghai. Third, SINOSURE worked with governments and banks to establish 53 platforms nationwide for financing. Last year, SINOSURE supported companies to obtain financing, with a combined figure of 310 billion yuan, including 196 billion yuan for short-term export credit insurance, up by 34%, supporting over 4,800 companies.

Fourth, we created new services for micro and small-sized companies. Over the past two years, SINOSURE has sped up its digital transformation and upgraded its database for global companies and banks, allowing companies to access the information of 200 million overseas companies and 60 million Chinese companies. On that basis, we developed several products to serve micro and small-sized companies. First, we developed the product "alarm sensor" for micro and small-sized companies to collect information about risks and threats in a bid to support them to avoid risks and accept orders. Second, we developed the product "navigation system" for micro and small-sized companies to expand to new markets and accept new orders with the support of our database on international trade. Third, we offered professional and convenient training services for micro and small-sized companies. We then selected 1,000 micro and small-sized companies that focused on the new generation of information technology, high-end equipment manufacturing, new energy and new materials, and other industries and provided them training to help them grow. In 2020, SINOSURE served more than 100,000 micro and small-sized companies, covering 36% of the micro and small-sized companies with export businesses. SINOSURE's insurance for exports from micro and small-sized companies stood at nearly US$100 billion, up by 41%. And the claims paid to those enterprises totaled US$120 million, up by 28%. In addition, the average premium rate for micro and small-sized companies dropped by 35%, offering more benefits to those companies.

Fifth, we actively help companies to prevent and respond to risks. Since the outbreak of COVID-19, SINOSURE has taken measures in the following aspects. First, we continued to publish information on trade-restricting policies across the world to inform companies. Due to the outbreak, many countries have adjusted their trade policies, including trade-restricting policies. So we published information about these policies and other industry information from major countries to inform our companies of risks. Second, we published reports on country risk ratings, evaluating country risk and sovereign credit risk of 192 countries and regions across the world to provide a reference for companies. Third, we helped companies retrieve their losses. Via over 300 channels, SINOSURE helped companies avoid defaulting, which saved nearly US$4 billion and retrieved losses worth US$300 million. In addition, we opened a "green channel" for companies to receive compensation and eased conditions to ensure companies were able to receive compensation efficiently. Last year, claims paid to enterprises totaled US$1.8 billion, up by 32%. The average time for the closure of short-term export credit insurance was cut sharply by 41%, marking a record low.

All in all, faced with complex environment of foreign trade and unprecedented risks and challenges, SINOSURE, as a policy-oriented financial institution, played a unique role in preventing risks, promoting financing, and ensuring stability in foreign trade and employment, contributing to the support of China's foreign trade and bucking the trend of recession. Thanks. 

Guo Shuqing:

Sorry to interrupt. I think Mr. Song answered your question very well. They did a very good job last year. Under the pressures of the worst pandemic for a century, they supported businesses, especially micro and small businesses, in their foreign trade by underwriting 22% of China's exports. It was, of course, a measure under special conditions. Normally, people may wonder if the measure was a special support given by the government, and if it abides by the WTO rules or the rules of fair trade. I see a lot of foreign journalists here today, so I'd like to ask you this question for them.

Song Shuguang:

Export credit insurance is a tool to promote exports and overseas investment permitted under the WTO rules. Our company has been doing business under the WTO's requirements. Our three major goals are to effectively serve national strategies, support the development of enterprises and ensure financial sustainability.

Nikkei:

When speaking with the media last August, Mr. Guo, you said there would be intensified efforts to dispose of non-performing loans (NPLs) in 2021. How do you see the current situation of NPLs in the banking sector? Have you made any specific plans to dispose of those loans? Thank you.

Guo Shuqing:

We will continue with our efforts to dispose of NPLs. Every year, we see approximately 12% net growth in loans. Last year was special as we saw a faster growth rate in loans. But the growth rate was still under 13%. From this, you can see that we hadn't adopted an overly relaxed monetary policy. After the COVID-19 outbreak, the productions and operations of some companies were abnormal and they faced difficulty in repaying their loans. A considerable number of enterprises may even face bankruptcy restructuring or bankruptcy liquidation, and even less ability to repay the loans. This is why the rise in NLPs is an inevitable trend. In 2020, we already started to increase our efforts to dispose of non-performing loans, with 3.02 trillion yuan in non-performing assets disposed of for the year. We have yet to set any definite goals for this year, and are communicating with banks to see their respective conditions. We might need to dispose of more NPLs this year and some may extend to next year as some are long-term loans. However, we have confidence and the capacity to dispose of those loans. While intensifying our efforts, we should seek steady progress to ensure that the impact of NPLs disposal is within the capacity of the economy and the banking system. For this question, I think bank chairmen can give you an authoritative response. Mr. Gu Shu, would you like to answer this question? Mr. Gu is now the chairman of Agricultural Bank of China (ABC) and used to be the president of the Industrial and Commercial Bank of China (ICBC). So, he is quite familiar with the situations of both banks.

Gu Shu:

I'd like to give you some figures to support Mr. Guo's words. Reducing credit risk has long been a major part of our risk prevention and control efforts. Currently, we have credit assets of 15 trillion yuan. In recent years, under the direction of CBIRC, the Agricultural Bank of China has continued to increase its effort to dispose of NPLs. Despite the COVID-19 pandemic in 2020, we disposed of a relatively high number of NPLs and maintained stability in our credit assets. As Mr. Guo just said, the banking system disposed of over 3 trillion yuan in NPLs last year. Our bank is a public company, so I'm not in a position to tell the exact number here today, but the scale of our NPLs disposals matches our position in the banking system. So, my first point is that we have intensified our efforts in disposing of NPLs and maintained stability in regards to our credit assets.

Second, despite the COVID-19 pandemic and the impact of economic fluctuations, the asset management capacity of Chinese commercial banks is improving. Take the Agricultural Bank of China as an example. We have adopted very strict definitions regarding NPLs. According to the regulation, loans are considered non-performing if the borrower is 90 days past due. But in our definition, corporate loans are considered non-performing if the borrower is 20 days past due, in order to increase our foresightedness in asset management. Our bank's NPLs ratio was relatively high for some time, but it has already dropped to the average level of our counterparts. The end of this month is a critical point as the Central Bank, last year, extended the repayment of principal and interest of small business loans to March 31, 2021. We have been recently following the asset quality of those loans. As far as we know, those loans have a higher NPL ratio than other loans but are still under our control. According to our statistics, there is a risk that the NPL ratio may rebound. However, we believe that the risk is controllable under the direction of CBIRC and the concerted efforts of our staff.

That's all. Thank you.

Guo Shuqing:

I'd like to make an explanation here. He said he is not in a position to tell you the exact number of NPLs. However, that number will be announced in accordance with the banks' rules as a public company. Some other information will also be disclosed, such as the level of remuneration of senior executives. So please feel free to ask him any questions. The socialist economic system and market economy system with Chinese characteristics have many similarities with the market economy system and financial system in Western countries. We disclose information about our capital funds, competition, labor productivity, and cost-to-income ratio. Our cost-to-income ratio is less than half of the banks in Europe and the United States. The main reason is that our salaries are relatively low. China is still a developing country. We need to take taxes, dividends paid to our shareholders, and other contributions such as poverty alleviation as well as our social responsibilities into account. Large banks in China need to assume many responsibilities, but our counterparts in other countries don't. We follow the same business and sustainability principles but our national condition is different from Western countries. Thank you.

The Paper:

During the Spring Festival, new data about the birthrate in China drew wide attention, and many are worried that China's aging population may affect its economic sustainability. What kind of long-term and institutional arrangements will China's banking and insurance sector make regarding its participation in improving the social security system and developing the old-age insurance system? Thank you.

Guo Shuqing:

What you've asked is very important. China is a developing country and an emerging market economy, but it didn't take long for China to become an aging society. Currently, more than 12% of China's total population are aged 65 and over. This figure is much lower than Japan and Europe. It is also lower than that of the U.S., which is about 16%. Nevertheless, according to experts' analysis, China may surpass the U.S. in this regard pretty soon. Therefore, aging populating is indeed a big challenge for China. We have been doing research on many aspects. A couple of days ago, the Ministry of Human Resources and Social Security held a press conference and briefed on the issue. It said that relevant measures will be adopted, including raising the retirement age. In contrast with the past, people nowadays are not willing to have more children, and this is a big challenge. We will also take other measures, including developing the third pillar of old-age insurance. The Central Economic Work Conference made specific arrangements on the issue, urging regulation of the development of commercial endowment insurance, more commonly referred to as the third pillar of China's pension system. Mr. Luo will give more information in this regard.

Luo Xi:

Thank you for your question. This is an issue of public concern among the media and society. As we know, China has entered an era of high life expectancy, and it faces the challenge of an aging population. Just now, Mr. Guo introduced the situation. The large number of China's aging population, the country's fast speed into an aging society, as well as the arduous tasks it has for elderly care have been rarely seen in the world. Compared with some developed countries, China's pension system is relatively complete. More than 1 billion people have been covered by basic old-age insurance, which has basically achieved full coverage. The system of enterprise annuities, occupational annuities, and group annuities is developing gradually. Despite the small proportion these types of annuities take, they have been developed for over ten years. The development of personal pension has been rather slow, and the proportion it takes in China is much smaller than in Western developed countries.

General Secretary Xi Jinping made deployments on the issue at the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. The State Council also held many meetings last year to study the issue. CBIRC conducted extensive research and formulated relevant policies and implementation plans. These efforts have sped up and strengthened the development of the third pillar of old-age insurance amid relevant reform and innovation efforts.

Compared with the first two pillars of old-age insurance, the third pillar has different functions and distinctive features. First, it provides a channel for personal pensions for high-income groups. Second, it provides a commercial guarantee of old-age care for employees of new business models and multiple working ways. Third, via the long-term funds for elderly care, we can promote the healthy development of the capital market, including cross-cyclical investment. There are more short-term investments and less long-term cross-cyclical investments in China. Thus, pension funds, especially commercial pension funds, can greatly promote the healthy development of the capital market once they enter into it.

In accordance with the deployments being made by CBIRC, The People's Insurance Company of China (PICC) has made some proactive efforts regarding the issue.

First, the PICC has proactively been introducing products of commercial endowment insurance. Through traditional life insurance products, nearly 330 billion yuan has been stashed away for people on elderly care and life insurance. In response to the deployments of CBIRC, we have been working to develop old-age insurance products which are suitable for the elderly of all income groups. In cities such as Shanghai, Fujian, and Suzhou, we have introduced tax-deferred personal commercial pension insurance. As the taxation is still insufficient, we suggest that the government make comprehensive considerations from multiple aspects and increase tax exemption appropriately. In addition, we took the lead and attempted to introduce reverse mortgages pension insurance in 29 cities. Traditionally, Chinese people are used to owning their own houses. How should people be financially prepared for elderly care when they get old? We have been proactively making attempts in this regard and opening a channel for them.

Second, the PICC has been actively introducing long-term care insurance, in a bid to address the nursing care issue of elderly people and those with disabilities and dementia. In 2020, the PICC established 96 long-term care insurance programs, providing services for some 42 million people. We have been actively working on these insurance services in all provinces and cities.

Third, the PICC has been proactively developing the pension industry. We have given full play to the advantages of long-term pension funds, established a PICC investment fund of senior care industry, and focused on the investment of senior care industries such as long-term care providers and comprehensive care providers for the senior. We have explored new insurance models of elderly care and launched the development of multi-layered elderly-care communities, in which elderly people have access to insurance, hospitals, and elderly care services for their various needs. The PICC is China's largest health insurance company, and we are also cooperating with some well-established global health insurance companies, in order to introduce some good business models into China.

Fourth, the PICC has actively participated in managing the funds of pension insurance. The amount of enterprise annuities and occupational annuities managed by the PICC has reached 250 billion yuan, more than twice the amount of last year. The rate of return of our business last year exceeded 10%, which played a good role in maintaining and increasing the value of our pension assets. 

The financial reform of pensions is crucial in coping with the aging society. The PICC will resolutely put into practice the deployments being made by the CPC Central Committee and work under the unified guidance of CBIRC, further giving full play to commercial insurance's role in pension risk protection and long-term fund management. The PICC will participate in developing a multi-layered and "multi-pillar" pension insurance system, accelerate the development of commercial pension products, and help develop the third pillar of old-age insurance. The PICC will make innovations on products and services, working to meet people's diversified needs on old-age care and make contributions in extending adequate old-age support. Thank you.

Bloomberg:

There is a question regarding fintech that I would like to ask Mr. Guo. What role should Ant Group's fintech company have in the domestic financial market? Are there any businesses that are not suitable for them? Thank you.

Guo Shuqing:

Thank you for the questions. Both domestic and foreign media are very concerned about the issue and have published quite a few reports. I believe you are well-informed about the situation. Four financial authorities (the People's Bank of China (PBOC), the CBIRC, the China Securities Regulatory Commission (CSRC), and the State Administration of Foreign Exchange (SAFE)) have carried out regulatory talks with Ant Group's top executives, and released update of their discussions in a timely manner. Pan Gongsheng, deputy head of the PBOC, has also made remarks on the issue.

China takes leads the world in online platforms' provision of financial services, in terms of both scale and scope. Much positive progress has been made, especially in digital credit and digital insurance to micro, small and medium-sized enterprises, among other services. Many innovations have been rolled out, and we encourage innovation.

But at the same time, we require that all forms of financial services, without exception, should be regulated in accordance with the relevant laws, rules, and regulations. For example, CBIRC recently released a notice on regulating commercial banks' internet loan businesses. According to the notice, when commercial banks jointly contribute funds to issue internet loans with a partner, the proportion of capital from the partner in a loan should not be less than 30%. It also set out requirements on the proportion of the balance of internet loans from a bank to its net worth. A one-year grace period was given to ensure steady implementation of the requirements.

We also encourage the development of private online banks, such as MYbank under Ant Financial Services Group, WeBank under Tencent, and another one based in Sichuan province. But the operation of these banks must be regulated in accordance with financial rules. We don't think of these as constraints on their business. But all their businesses, such as insurance, trust, leasing and other financial services, should comply with the rules of the financial sector. I believe those institutions will meet the requirements and achieve more healthy development. Thank you.

Phoenix TV:

Mr. Guo, we noticed that the U.S. administration has imposed sanctions on some Chinese companies and individuals. What's the impact of the sanctions on China's financial market and system? Where do Chinese financial regulators stand and what measures will be taken in response to the sanctions? In addition, what new steps will be introduced this year to advance the opening-up of the financial sector? How will the security review mechanism on foreign investment affect the investment of foreign financial institutions in China? Thank you.

Guo Shuqing:

Every country has its own sovereignty. This is a long-established consensus among the international community. Both China and the U.S. are sovereign countries, and we all have our own sovereignty. Therefore, financial institutions in China must be regulated in accordance with Chinese rules, just as financial institutions in the U.S. must follow U.S. rules. The U.S. has interfered a lot in Chinese internal affairs, which we think is groundless and unreasonable. We firmly oppose such interference. CBIRC as well as China's banking and insurance system as a whole will never act in accordance with U.S. laws and regulations. We must implement China's laws and regulations. Financial institutions in Hong Kong, including Chinese-funded institutions and foreign-funded institutions, must conform to Hong Kong's laws and regulations. We will not implement the U.S. sanctions, and we firmly oppose such sanctions, which are totally non-binding. However, we are willing to cooperate with American financial institutions, companies in all sectors, and intermediary agencies. In fact, China's opening-up has been advanced at a fast pace. As I mentioned just now, over the past three years, we have approved the establishment of more than 100 foreign banking and insurance institutions in China. For example, German insurer Allianz was approved to set up a 100% foreign-owned subsidiary in China; Crédit Agricole Corporate and Investment Bank and Bank of China jointly established a wealth management subsidiary; the largest asset management company BlackRock cooperated with China Construction Bank in pension fund management; and British multinational asset management company Schroders is cooperating with the Bank of Communications. Up to now, we have approved the establishment of 25 wealth management subsidiaries. Many are in cooperation with foreign capital. We welcome more foreign investment, no matter if it's in the form of sole proprietorship or joint ventures. Many of the examples I gave now are joint ventures. This year, we will continue to consider expanding cooperation in these areas and further lowering the threshold for foreign investment to ensure they receive the same treatment as Chinese-funded institutions. In fact, no field is not opening up.

There is concern among the domestic public, including some officials and intellectuals, that foreign capital may bring about disruption and damage to China's financial market. As far as we know, foreign-funded institutions generally observe Chinese laws in their operations. The amount of their total assets, loans and deposits in the Chinese market is on the rise, but the proportion is in decline. For example, foreign-funded banks now account for only 1% of China's banking industry, down from 1.3% and 1.4% before. Their market competitiveness is limited. Foreign-funded insurance companies account for about 6%, higher than that of the banks, but their influence is also limited. Therefore, we continue to encourage foreign financial institutions to enter the Chinese market for common development. Thank you.

China Daily:

This year marks the start of the 14th Five-Year Plan. What measures are the banking and insurance sectors taking in terms of serving innovation-driven strategies, developing technological finance and supporting strategic emerging industries? What do you plan to do next? Thank you.

Guo Shuqing:

I would like to invite Mr. Zhao Huan, chairman of CDB, to talk about this issue. As we have just discussed, the development bank is involved in development finance. It is very courageous, doing business that others haven't, so its development business is pioneering. However, since the investment risks in the technology and innovation industries are very high, I asked him about how to manage the risks of investment loans. Since we do not have special policies for CDB, it has to achieve business sustainability on its own terms. So, I'd like to invite Mr. Zhao to answer this question.

Zhao Huan:

Thank you for your question. And thank you Mr. Guo for providing this opportunity to introduce the current situation, which demonstrates how development finance has served science and technology innovation and innovation-driven development.

In recent years, in order to implement the new development concepts, under the guidance and support of CBIRC and other departments, CDB has vigorously developed technological finance and served innovation-driven development, achieving positive results.

First, we have given our full support to major science and technology innovation projects. In 2020, we issued a total of 149.4 billion yuan in loans to support science and technology, which is an increase of 23% year on year. We have served a series of major scientific and technological projects, in such areas as integrated circuits and commercial aircraft, assisting new breakthrough achievements in core technologies within key areas.

Second, we have actively supported the development of strategic emerging industries and advanced manufacturing industries. In 2020, we issued 330.4 billion yuan in loans to strategic emerging industries, and issued 265.9 billion yuan in medium- and long-term loans to manufacturing industries, representing an increase of 37% year on year, which is a record high.

Third, we have vigorously supported investment in the integrated circuit industry. CDB's subsidiary companies have successfully completed the first phase investment for the national integrated circuit industry investment fund, and supported the rapid development of key enterprises in the integrated circuits industry, with the investment achieving a remarkable economic effect. We have been operating on a market-oriented basis. Last year, the value of technology companies increased significantly, and the funding investment also achieved a significant economic effect. The market-oriented operation was very successful. At the same time, we have also participated in setting up the second phase investment for the national integrated circuit industry investment fund, and raised a total of 200 billion yuan. The fund has now entered the investment phase.

This year marks the first year of the implementation of the 14th Five-Year Plan. CDB will earnestly implement the major decisions and deployments made at the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference. We will continue to support technological finance, provide services to make the science and technology industry more self-reliant, and better serve the innovation-driven development strategy. Our work will cover four measures:

First, we will set up special loans to serve and strengthen the national strategic science and technology capabilities. We will synergize with the 10-year action plan for national basic research, the strategic science and technology plans, and the construction of major national science and technology projects, laboratories, science and innovation centers. We will set up special loans for scientific and technological innovation and basic research, and plan to issue more than 50 billion yuan in special loans for major scientific and technological projects this year.

Second, we will continue to provide more credit resources and support the high-quality development of strategic emerging industries and advanced manufacturing industries. Starting this year, we are planning to launch special financial activities as part of the "Bailian Qianqi" program. We will select a hundred leading enterprises in the field of science and technology innovation and a thousand of their key upstream and downstream industrial chain businesses to provide special financial services. We are also planning to arrange more than 400 billion yuan in loans for strategic emerging industries and advanced manufacturing industries.

Third, we will increase equity investment and offer services for modernizing the industrial and supply chain. We will apply the industrial investment funds and science and technology innovation funds managed by the CDB and continue to increase equity investment in integrated circuits, advanced manufacturing, and science and technology innovation. We are planning to increase the equity investment by over 50 billion yuan.

Fourth, we will create new models for technological finance and provide effective support for innovation-driven development. We will use a combination of multiple financing models, including equity investment, credit loans, structured financing and "debt financing plus investment options," to support innovation-driven development. In addition, we will play a guiding role in partnering with other financial institutions to integrate various resources and social capital, and are planning to increase the intensity of serving innovation-driven development through syndicated loans, joint loans and joint investment.

Finally, I would like to thank you again for your interest in technological innovation-driven development and development banks. Thank you.

Cover News:

We know that in recent years, financial institutions have done a lot of work in poverty alleviation, but there are still many farmers and township enterprises reporting that there is a problem with loan difficulties. As the poverty alleviation task has been completed as scheduled, may I ask what new achievements will be made in terms of consolidating the results of poverty alleviation and rural revitalization? Thank you.

Guo Shuqing:

We should all give our respective answers to your question, but due to time constraints, we will get Gu Shu, chairman of the Agricultural Bank of China, to answer it.

Gu Shu: Thank you for your question. I understood your questions had two parts. First, what are the bank's plans for consolidating the results of poverty alleviation and rural revitalization? The second is to reflect on the availability of rural finance. I will answer them separately.

For the first part of your question, taking the Agricultural Bank of China as an example, I would say that we are ready to focus on three aspects in the next step. The first is to ensure that we embark on a program of rural revitalization after the victory in poverty alleviation. The second is to support the development of modern agriculture and rural industries. The third is to support rural construction. This is the answer to your first question. 

In terms of focusing on the effective connection between poverty alleviation in financial services and rural revitalization, I will talk about one main point due to the time limit. In the 832 key counties that have benefited from national poverty alleviation initiative, the Agricultural Bank of China will continue to provide strong credit lines and loans in 2021. The growth rate of loans to poverty alleviated counties continues to exceed the average growth rate of loans of the entire bank. This is the point I want to stress. In terms of modern agriculture and rural industries, we plan to focus on the national food security industry belt, the construction of high-standard farmland, and the turnaround of the seed industry, and provide financial support in these three areas. Our current loan balance in the field of food security is 160 billion yuan, and we plan to further invest more than 60 billion yuan this year. In addition, we will increase credit allocation for primary processing and deep processing of specialty agricultural producing localities. Previously, the Central Rural Work Conference pointed out that the main body of the industrial chain should be kept at the county level, and the benefits of the value chain should be reserved for farmers. The third is rural construction. We will focus on 11 key areas of national rural and agricultural investment, and continue to increase support for eligible rural aspects such as water, electricity, road, natural gas and housing. The Agricultural Bank of China's loan scale in the field of rural construction has exceeded 1 trillion yuan. We will further increase our investment in the future to ensure that the growth rate of loans does not decline. This is my brief answer to the first aspect of your question. 

Regarding the second part of your question, you mentioned the availability of financial services and the difficulty of obtaining loans in financial services. I want to talk about the plan of the Agricultural Bank of China.

Serving agriculture, rural areas and farmers are surely demanding us to be more down-to-earth, but on the other hand, we are also considering how to solve the problem of accessibility. The key point is that we think that the "three rural" services should not only be grounded, but also have wings -- the wings of technology. This is mainly reflected in channel innovation and product innovation, with two key points.

One is channel innovation. We will strengthen the construction of offline physical outlets and build more outlets in counties and towns, and at the same time increase the promotion of mobile banking in rural areas. Mobile banking is very common in cities, and next we must make mobile banking more in line with the needs of rural areas and farmers. By the end of last year, the Agricultural Bank of China had registered 165 million mobile banking customers in rural counties, and the number of its monthly active customers was close to 50 million. This year, we will further increase efforts in this area to allow farmers to obtain financial services more conveniently and quickly. The other aspect is product innovation. We will launch online financing products to make it easier for farmers to obtain loans and financial services. For example, an innovative online financial product has been launched called "Huinong e-Loan." This product realizes online application, online approval, online issuance, and online repayment of rural clients' loans, thus comprehensively improving the coverage and processing efficiency of rural clients' loans. It provides more credit and loan support to more farmers. By the end of last year, the balance of this product had exceeded 350 billion yuan, benefiting 2.76 million rural households. We plan to invest another 160 billion yuan this year to make the balance of "Huinong e-Loan" exceed 500 billion yuan. This product is very effective in many places, especially in some remote areas. Let me give you an example: Tibet. Based on the characteristics of its industry, our Tibet bank branch has innovatively launched a group of farmer-benefiting products that poor people can understand and find easy to operate, such as the "yak loan," "highland barley loan". At the end of last year, the balance of targeted poverty alleviation loans exceeded 6 billion yuan. More than 70% of poverty-stricken households with registered cards in Tibet received microfinance support from our bank, accounting for more than 90% of the loans provided by the financial institutions in Tibet. We are also making a lot of effort in this regard to solve the problem of financial availability for rural households, especially in hinterlands as you mentioned just now. Thank you again for your question.

New York Times:

I'm from New York Times. A question for chairman Guo and also a question for Mr. Song, please. Chairman Guo, some people argue that fintech companies have so much information on their customers that they don't need in the medium or long-term to make the same capital adequacy standard as banks. Do you agree with that or is your medium-term goal here or over next several years to push the fintech sector directly or indirectly towards the same capital adequacy standard as banks? And second, Mr. Song, you mentioned near the end of your remarks a 32% jump in compensation last year for Sinosure's payout, and we've all seen there have been tremendous difficulties in many commodity-rich developing countries that have borrowed a lot through Sinosure. So where does the money come from for that 32% increase in compensation? Did Sinosure need some kind of additional injection of money from the Finance Ministry or others, or was that mandatorily through big jumps in the premiums that you charge exporters? Thank you.

Guo Shuqing:

Your question is a very good one. As I mentioned above, if a company's financial operations are carried out through the internet platforms, whether it be banks, micro-loan companies, or consumer financing companies, we do require them to have adequate capital like other financial institutions. At a thematic meeting held by the National Committee of the Chinese People's Political Consultative Conference in May 2018, Vice Premier Liu He made some remarks, which I think are very informative for all sectors of society. First, he said you need capital to do business. You need even more capital in the financial sector. China's financial sector ran well as early as more than two thousand years ago, and back then people had capital. How do you promote finance without capital? The same is true of other industrial and commercial businesses. Second, Liu stated that money borrowed needs to be repaid. You lend money and you must get repayment, otherwise business is unsustainable. The same applies to banks. Why are there many illegal fundraising cases? Many people tricked into fundraising happily think that the profits are high, say 8%, 10%, and 12%. When explaining why the earnings from banks are so low, those behind the illegal fundraising say that banks face high costs due to a large number of employees and property, so they can't provide high returns. This is not true and the main reason is actually because of capital constraints. Banks are more cautious and they must get back what they have lent, otherwise, they would collapse. Third, Liu noted that investment involves risk. Whether it be for individuals, institutions, or enterprises, investment can be risky and we must be aware of this. Fourth, Liu remarked that you will pay a price for bad doings. Therefore, we require internet platforms to have the same capital adequacy ratio as long as they have the same financial business. However, for historical reasons, we have given them a transitional period, some until the end of this year and some until the end of next year, and we may do some research and make the period even longer for some platforms. In the past, some financial institutions served small and micro enterprises, especially low-end clients, and we had relatively low requirements for these institutions. They offered 2% or 3% of loans as intermediaries between lenders and borrowers. We don't want to affect these clients so that they can continue to receive loans steadily. The transitional period can be longer, for them and that depends, but the maximum is two years, after which all the institutions should move back on track and are subject to capital constraints.

Song Shuguang:

I'm happy to answer this question. Sinosure is a policy-backed insurance company but it also operates based on the market and following commercial principles, which forms both the backdrop and premise.

You mentioned the increase in compensation last year and wonder where the money came from. Well, we operate completely as a commercial company and we set aside reserves every year based on reported losses, settled yet-to-be-paid losses, and losses that have been compensated and paid. The accumulated reserves set aside over the years support our compensation and payment. Risks were on the rise last year but manageable on the whole. Thank you.

Hong Kong Economic Herald:

I have a question for Mr. Guo. You said earlier in Hong Kong that Hong Kong is an irreplaceable bridge. What new measures will the CIRC take to support and stabilize Hong Kong's status as an international financial center during the 14th Five-Year Plan period, especially to support Hong Kong as an offshore RMB center as well as the issuance of digital currency bonds?

Guo Shuqing:

Digital currency is mainly a matter of the central bank. Although I work in the central bank, today is a special session of the CIRC. You may seek an answer another time from the staff of the central bank.

My colleagues and I share the same attitude towards the issue of Hong Kong. We are full of emotion and we firmly support the long-term prosperity and stability of Hong Kong. As an important financial center in the world, Hong Kong has played an irreplaceable role in the past 40 years of reform and opening up on the Chinese mainland. As far as the utilization of foreign capital is concerned, the vast majority of foreign direct investment and the vast majority of foreign capital flowed in through Hong Kong. At present, investment in the capital market, such as the "Shanghai Hong Kong Stock Connect," "Shenzhen Hong Kong Stock Connect" and "Bond Connect," also came in through Hong Kong. I still remember that when I was the chairman of the CSRC in 2012, two officials from the Hong Kong Stock Exchange and the Shanghai Stock Exchange studied and put forward the idea of the "Shanghai Hong Kong Stock Connect". When we discussed it together, we thought it was very feasible and indeed it has played a very good role. In the course of future development, Hong Kong can also provide support for mainland enterprises in listing and issuing bonds. We support foreign debt, US dollar debt, foreign currency debt, RMB, Hong Kong dollar and other forms. We also support the listing of banking and insurance institutions in Hong Kong and the development of more Hong Kong banking and insurance institutions on the mainland. We hope to continue this trend in the future.

Recently, we have formulated the development plan of the Guangdong-Hong Kong-Macao Greater Bay Area, in which the financial sector accounts for a large proportion, and there will be many new initiatives. There will be more new initiatives especially in the aspect of financial management, such as financial links. These initiatives are now being studied and discussed and will be gradually implemented. We believe that Hong Kong's economic growth will turn from negative to positive this year, and there will be good prospects. Thank you.

Hong Kong Commercial Daily:

Mr. Guo just mentioned that the banking industry has fulfilled a lot of social responsibilities. Last year, financial institutions provided 1.5 trillion yuan worth of benefits to society. My question is, can this policy continue this year? What measures will be taken to support the real economy? Thank you.

Guo Shuqing:

A lot of existing policies will continue. Since the interest rate of the whole market is picking up this year, I expect the interest rate of loans will also rise. There may be some adjustments, but overall, the interest rate is still relatively low. In addition, there will be no big change in fees, and the reduced fees will not be recovered. We will continue to support enterprises and reduce their burden by supporting financial restructuring, debt restructuring, enterprise restructuring, debt to equity swap and other forms.

Zhao Huan: 

Last year, the China Development Bank provided 33.5 billion yuan worth of benefits to the real economy by reducing the loan interest rate, and reducing and remitting the charges for intermediary business. This is a direct transfer of benefits, not including the support for financial restructuring, bankruptcy restructuring, bad debt write-off and other aspects mentioned by Mr. Guo just now. This year, the China Development Bank will continue to actively support the development of the real economy and maintain a low level in loan pricing. Of course, the cost of loan capital will change with market changes. On the whole, the net interest margins of banks will remain at a low and stable level. In terms of charges, it will continue to provide benefits to the real economy to strongly support the "six stabilities" and "six guarantees". Thanks.

Shou Xiaoli: 

Today, our press conference lasted about 100 minutes. Thank you, Mr. Guo. Mr. Guo not only released information as a speaker, but also asked questions as a reporter. Thanks to all the speakers, and also to all the friends of the press. That's all for today's press conference. Goodbye, everyone.

Translated and edited by Cui Can, Guo Yiming, Liu Qiang, Zhu Bochen, Li Huiru, Zhang Liying, Wang Yanfang, Yan Xiaoqing, Fan Junmei, Zhang Rui, Wang Zhiyong, Xiang Bin, Mi Xingang, Huang Shan, Wang Wei, Wang Yiming, Yuan Fang, Gong Yingchun, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

Speakers:

Xiao Yaqing, minister of industry and information technology

Tian Yulong, member of the Leading Party Members' Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

March 1, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Matters concerning industry and information technology are of crucial significance to the overall development of both the Communist Party of China (CPC) and the Chinese government. Today, we are delighted to be joined by Mr. Xiao Yaqing, minister of industry and information technology, who will introduce the development of this sector and answer your questions. Also present at today's press conference is Mr. Tian Yulong, a member of the Leading Party Members' Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson. Now, let's give the floor to Mr. Xiao.

Xiao Yaqing:

Friends from the media, ladies and gentlemen, good morning. Welcome to today's press conference and thank you, Ms. Shou, for the introduction. I would like to take this opportunity to brief you on the situation of the industry and information technology sector in China. As you know, 2020 was an extraordinary year. Facing the challenging and complicated international situation, especially the once-in-a-century COVID-19 pandemic, the MIIT and other government bodies have been working under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, fully implementing the decisions and deployments made by the CPC Central Committee and the State Council. The MIIT has earnestly fulfilled our duties to ensure the supply of protective materials and spared no efforts in helping promote the resumption of work and production of the whole industrial chain. We have also been making new efforts concerning the application of information technology in infrastructure, the development of the internet, and the digital economy. These efforts have provided support in obtaining strategic anti-epidemic progress and helping China's economy realize positive growth. Concrete steps have been taken in building China's strength in cyberspace and manufacturing. As the last year of the 13th Five-Year Plan period, 2020 has marked a successful end to the plan.

Looking back over the past five years, China's industry and information technology sector has made remarkable progress. In general, its overall capacity has been further strengthened. New progress has been made regarding innovation in key fields, while growth drivers continue to strengthen and the development environment keeps improving. These have provided strong support for the stable and healthy development of the real economy and even national economy as a whole. Here, I would like to present three groups of figures:

First, the total value-added of industry in China has grown from 23.5 trillion yuan to 31.3 trillion yuan, making China the world's largest manufacturer for 11 consecutive years. China has contributed nearly 30% of global manufacturing output. 

Second, during the 13th Five-Year Plan period, the average growth rate of the value-added output from China's high-tech manufacturing sector reached 10.4%, 4.9 percentage points higher than that of the value-added output from industries above designated size. The proportion of value-added output from the high-tech manufacturing sector in that from industries above designated size has increased from 11.8% to 15.1% since the 13th Five-Year Plan began.

Third, the value-added output from the information transmission and software and information technology service industries has also seen remarkable progress, surging from 1.8 trillion yuan to 3.8 trillion yuan, with the proportion in gross domestic product growing from 2.5% to 3.7%.

Looking ahead, the Fifth Plenary Session of the 19th CPC Central Committee has laid out the blueprint for the 14th Five-Year Plan and beyond, underscoring the need for China's economic development to focus on the real economy, and resolutely building China's strength in manufacturing and cyberspace. These are leading the way for our future works and serve as the basic principle. The industry and information technology system will work based on both domestic and international dynamics, bearing in mind the top priorities of both the CPC and the Chinese government. We will develop a full understanding of the new development stage and resolutely implement the new development philosophy. Following the general principle of pursing progress while ensuring stability, we will take high-quality development as the main theme and take supply-side structural reform as the main task, in a bid to ultimately fulfill people's growing needs for a better life. We will ensure both development and security, and work to modernize the industrial and supply chain. By further consolidating the foundation, making use of advantages and reinforcing weak links, we will work to make new progress in strengthening manufacturing and cyberspace in China.

First, we will further implement the strategy of innovation-driven development, and redouble our strategic support to build China's strength in manufacturing and cyberspace. As you know, new-generation information technology, new material technology and new energy technology are developing at an accelerated pace. This has led to profound changes in the developing pattern of the global economy and the international division of labor. Therefore, we need to stick to the basic requirement of being self-reliant in science and technology, giving full play to China's mega-sized market advantages and new types of national framework. We need to promote innovation-driven development, systematically improve innovation capacity, and pay extra attention to the R&D of core technologies. We must improve the supply system of generic basic technologies. In particular, we need to improve the enterprise-centered innovation system and encourage more investment from enterprises, so as to develop more original and groundbreaking technologies. To encourage innovation in this regard not only means developing more products and techniques from specific technologies and products, but also improving the innovation capacity of our manufacturing sector.

Second, we need to work to improve the stability and competitiveness of industrial and supply chains, in a bid to create new advantages for future development. A self-reliant, complete and resilient industrial and supply chain is crucial to the stable growth of the economy. China has the most complete industrial categories and most varieties of supporting industries, which have deeply integrated into the international division of labor. This not only ensures the stable and healthy development of China's economy, but also greatly contributes to global economic growth. We need to highlight improvements to the stability and competitiveness of China's industrial and supply chain, carry out action plans to improve and strengthen these chains concerning our manufacturing sector, and implement projects to rebuild our industrial foundation. We need to accelerate efforts to reinforce weak links, develop our advantages, and foster emerging industrial chains. We will work to build our capacity in developing self-reliant and controllable industrial and supply chains, effectively safeguard China's economic security and develop new advantages for future development, in a bid to firmly seize the initiative in the fiercely competitive global market.

Third, we will vigorously promote the optimization and upgrade of the industrial structure and improve the overall quality of the industry. The optimization and upgrade of the industrial structure are key to improving our economic competitiveness. We will focus on "accelerating the development of the modern industrial system," make efforts to "consolidate, strengthen, upgrade, and ensure unimpeded flows," while deepening supply-side structural reform, pragmatically transforming development patterns, and enhancing the adaptability of the manufacturing supply system according to domestic demand. We will accelerate the implementation of key technological transformation and upgrading and provide quality improvement. We will build a green manufacturing system, promote orderly relocation of some industries in the domestic market, and strengthen graded cultivation for superior enterprises. We will speed up the transformation and upgrading of traditional industries, and foster the development of emerging and strategic industries such as integrated circuits, 5G, new energy, new materials, high-end equipment, new energy vehicles, and green environmental protection. We will also develop future industries to build industrial clusters with international competitiveness.

Fourth, we will accelerate the development of the digital economy and create new driving forces through a digital revolution. The economic digital transformation is an inevitable trend and we should grasp the direction in which digitalization, networking, and intelligentization are developing; give full play to China's existing foundation and advantages; and coordinate digital industrialization and industrial digitalization. We will fully implement a new generation of information and communication infrastructure via 5G, the industrial internet, and data centers, and promote digital transformation in manufacturing, intelligent manufacturing, and a digital revolution in SMEs. We will deeply integrate a new generation of information technology in manufacturing, as well as mix manufacturing with the service industry and speed up the development of the digital economy. The most fundamental pursuit is to promote the development of the real economy.

Fifth, we will further deepen reform, expand high-level opening-up, and enhance new development vitality. The development and achievements in the industrial and information industry rely on reform and opening-up. Implementing the 14th Five-Year Plan (2021-2025) and pursuing new development in the future, we also need to deepen reform and opening-up. In order to realize our goals of building China into a cyber power and a manufacturer of quality, we should devote more efforts to reform and opening-up, make better use of breakthroughs, and take a leading role in reform and maintain stability in manufacturing output. We will press ahead with reforms to streamline administration and delegate power, improve regulation, and upgrade services, and implement measures for reforming the market-based allocation of production factors. We will strengthen industrial policy guidance, make manufacturing more attractive to all types of resource factors, and deeply integrate reform and development. We will further promote efficient interconnection, expand opening up, fully open general manufacturing, and relax restrictions on market access. By doing these things, we can better utilize domestic and international resources and markets, form safer and more controllable industrial chains with more innovation and higher added value, and cultivate additional advantages for Chinese enterprises to participate in international cooperation and competition.

That's all for my introduction. Mr. Tian Yulong and I will now answer your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao. Now the floor is open to questions. Please state the name of your news outlet before asking your question. Thank you.

CCTV:

The 14th Five-Year Plan proposes fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, which concerns all sectors of society. How do you see the status and role of China's industrial and information industry in fostering the new development paradigm? What are your plans and measures? Thank you.

Xiao Yaqing:

Thanks for your question. Fostering the new development paradigm is related to the overall systematic and profound reform, and is a strategic plan that focuses on both the present and the long term. Experience tells us that to foster the new development paradigm, the industrial and information industry is not only the main battlefield and main driving force but also a pioneer and forerunner necessary for development. We will unswervingly implement the decisions and deployments of the CPC Central Committee and the State Council, target the right position, point to strengths and breakthroughs, and make great efforts to step up innovation in line with the new development paradigm. In order to achieve fairer, safer, and more sustainable development with higher quality and higher efficiency during industrialization and informatization, we will focus on the following aspects.

First, we will focus on domestic scientific and technological development to improve innovation capabilities within the industrial chain. New fields such as integrated circuits, critical software, new materials, and major equipment, as well as key areas including industrial internet and the relevant manufacturing sectors, will be highlighted. We will accelerate the establishment of a manufacturing innovation center and internet systems with a national manufacturing innovation center as the core, strengthen the dominant position of enterprise innovation, promote the application of new technology industrialization and large-scale utilization, and form new advanced manufacturing capabilities.

Second, we will focus on maintaining a complete industrial chain system to win the battle of advancing industrial foundation and modernizing the industrial chain. Consolidating and supplementing the industrial chain and rebuilding our industrial foundation will be emphasized via improving core basic parts, key basic components, advanced basic manufacturing technology and equipment, key basic materials, and industrial software, which I mentioned previously. We will fully intensify scientific and technological innovation and continuously strengthen the resilience and elasticity of the industrial chain to avoid leaving any loopholes.

Third, we will make efforts to expand domestic demand, ensure smooth flow of economic activity, and speed up improvements in the quality of the manufacturing supply system. We rely on expanding domestic demand since the domestic market is so large and has huge potential. Work to improve quality will continue according to domestic demand. We will also make efforts to increase variety, create brands, strengthen and boost information consumption, and further expand manufacturing equipment renewal and technological upgrading. Our high-end, smart, and green development will meet market needs in a systematic way.   

Fourth, with focus on domestic and international circulations reinforcing each other, we will further improve opening-up of the country's industry and information technology. We are going to fully open up general manufacturing, orderly lift restrictions on foreign investment in telecommunication, and attract more high-end manufacturing projects with foreign investment. Recently, we witnessed how a few world-famous companies invested in China when the COVID-19 outbreak was severe last year. We will attract more institutions and talents, especially in the manufacturing industry, and encourage strong Chinese enterprises to improve their international operative level and deeply blend into the global industrial, value, supply, and innovation chains. Economic globalization and global division of the industrial chain will be an irreversible trend. Based on joint efforts to build the Belt and Road, we will promote international cooperation on industrial chains, and foster a new development paradigm with domestic and international circulations reinforcing each other. Thank you for your question.

Thecover.cn:

The new energy vehicle (NEV) industry has seen major growth in China, but is also becoming increasingly competitive. How is China's NEV industry going in general? What measures will be taken to further support its development? Thanks.  

Xiao Yaqing:

Thank you for your questions. NEVs are the main driver for the green development, transformation, and upgrading of the global vehicle industry, and also a strategic choice for China's vehicle industrial development. In recent years, the MIIT and China's other relative departments jointly formulated approximately 60-plus supportive policies and measures. Relying on joint efforts made by local governments, departments, and enterprises, our country's NEV industry has made substantial breakthroughs in basic materials, parts, motor, electronic control, battery, and whole vehicle production. China's NEV production and sales volume has ranked first in the world for six consecutive years, and more than 5.5 million vehicles have been accumulatively promoted. 

Last year, the State Council unveiled a development plan for the NEV industry for the 2021-2035 period, making clear the direction of development and enhancing confidence in the industry, among enterprises, and with investors. Last year, the global NEV sales decreased, but our performance remained fairly good, with a high growth rate of 10.9%, and will continue its upward trend. However, we are also keenly aware that the industry is still at a crucial stage where we must work harder to overcome difficulties. The NEV market is very competitive itself and people are optimistic about the future of the industry. From technology, quality, and consumer perspectives, some problems still need to be dealt with.  

Next, efforts will mainly be made in the following aspects. First, improve quality. Based on early development, we will raise standards and strengthen quality supervision according to the needs of the market and consumer experience. Enterprises should continue boosting manufacturing levels to improve quality.  

Second, promote integration. People understand the concepts of "new energy" and "vehicle." However, NEVs incorporate many technologies. The development of NEVs also needs the integration of smart roads, communication networks, and cloud technologies to ensure a satisfactory experience. The further integration of electrification and intelligent networks will help develop new functions to better meet the needs of consumers. 

Third, optimize the environment. The development of NEVs is inseparable from the layout of charging stations. We need to improve environmental protection measures concerning charging and parking. Meanwhile, we will strengthen the electrification of public transport.  

Finally, expand opening up. We have fully lifted restrictions on foreign investment in the NEV industry. On that basis, we will be open for technological innovation, international trade, and even the formulation of standards and regulations, which will inject new momentum into the development of the NEV industry. Thanks. 

CNBC:

My question is, what specific goals or production plans does China have for the chip industry during the 14th Five-Year Plan period and amid global changes? Thank you.

Xiao Yaqing:

Thanks for your question. Let's invite Mr. Tian to answer it.

Tian Yulong:

Thanks for your question. Chips and integrated circuits are the cornerstone of the information society and an important foundation of information technology. The high-quality development of the chip industry is related to the development of the modern information industry and industrial chains. China saw a very impressive and constantly growing integrated circuit industry during the 13th Five-Year Plan period. According to the estimates of China's semiconductor industry, China's revenue of integrated circuit sales reached 884.8 billion yuan in 2020, an average growth rate of 20% and three times the growth rate of the global integrated circuit industry during the same period. We have also made breakthroughs in technological innovation, with significant improvement in manufacturing techniques, packaging technologies, and key equipment materials. Companies also grew steadily, a number of whom emerged as global leaders in design, manufacturing, packaging and testing, and other links on the industrial chain.

On the whole, the Chinese government highly values the chip and integrated circuit industries, and has issued policies for the high-quality development of the integrated circuit and software industries, while comprehensively optimizing policies for the high-quality development of the chip and integrated circuit industries. There are several main measures.

First, we have introduced further tax cuts for companies. The policies of reducing or exempting corporate income tax for profit-making integrated circuit enterprises have boosted their development. Second, we have further strengthened the foundation. The development of chips involves many basic aspects, including materials, techniques, and equipment, and relies on a considerably large industrial chain. Only by laying a solid foundation, can there be constant innovation and growth for the industry. In addition, the integrated circuit industry needs a very good ecological environment to build a platform that can form a complementary and mutually supportive process in the industry chain. Therefore, it is critical to have a platform and a good ecosystem. The development of the chip industry is completely guided by the application of its products. Therefore, the rapid development of the automobile sector, industry, medical care, and education, especially the online economy and digital economy since the COVID-19 outbreak, has provided a very broad market for the chip industry. The development of the industry also relies on talent, so the government and the country have adopted a series of measures to boost our talent reserves and training. Finally, the chip industry is globalized, and we should increase collaboration.

In general, the chip industry faces both opportunities and challenges. It is necessary to strengthen collaboration on a global scale to jointly build a global industrial chain and make it healthier and more sustainable. It will not only support the development of China's information society, but also support global applications of information technology. The Chinese government will create a market-oriented, law-based and international business environment and ecosystem for the industry with efforts at the national level. That's all I have to say for it. Thank you.

CNR:

We noticed the huge impact of the pandemic on the Chinese and global economy since last year, but China's industrial chains and supply chains have withstood the test and made important contributions to epidemic prevention and control and steady economic growth. What plans and measures do you have to stabilize and strengthen industrial chains and supply chains during the 14th Five-Year Plan period? Thank you.

Xiao Yaqing:

Thanks for your question. I agree with you in that the impact of the pandemic has been a real stress test on our industrial chains and supply chains. We can say that we have withstood the test over the past year, and showcased our advantages in having a comprehensive industrial system, strong capabilities in mobilizing resources and the ability to transform our industries. An obvious example is our early supply of anti-epidemic materials, such as protective clothing, masks, disinfectants, ventilators, and various drugs and auxiliary medical equipment, and our rapid resumption of work and production subsequently.

However, we must be soberly aware of our shortcomings and weaknesses in the industrial chains and supply chains shown in that process. Therefore, we already started analyzing our 41 major industries and their industrial segments, and drawing the map of key industrial chains to find out our gaps, weaknesses and shortcomings. Of course, we have many advantages. After analyzing our industry chains and supply chains, we will be able to accurately design them, implement targeted policies, and lay a solid foundation. This way, we can strengthen industrial clusters that we excel in, and make up for any prominent shortcomings and other weaknesses. In short, we will bolster our strengths and make up for shortcomings. This will ultimately make our industrial chain more resilient. 

To bolster our strengths means to develop our strong points, and strive for more say in development. For example, we will cultivate new industrial chains, as I have just mentioned, in fields such as 5G, new energy vehicles, high-end medical equipment, biomedicine and new materials, and maintain the integrity of industrial chains while improving the traditional ones. We have a number of traditional industrial chains in a wide range of sectors, with many of them producing the largest volume of products in the entire world. They not only meet the needs of China, but also contribute to global economic growth. Therefore, it is very important to maintain the integrity of our industrial chains. We will also optimize the regional layout of our industrial chains. Different regions in China have quite different economic characteristics. Therefore, we will further tap into the advantages of industrial clusters in accordance with regional characteristics and layouts to make the industrial chains more embedded and competitive.

To make up for shortcomings means to make improvements so that we do not drop the ball at critical moments. It mainly involves two aspects of work. One is to reengineer industrial foundation. It targets fields with obvious weaknesses and shortcomings. We will seek breakthroughs via new mechanisms, such as driving the overall industrial development with an application-oriented approach, and selecting the best candidates to lead key research projects. The other is to speed up the construction of national manufacturing innovation centers. We have set up 17 during the 13th Five-Year Plan period, achieving positive results. Next, we will further accelerate construction of national manufacturing innovation centers to boost industrial innovation. We will motivate local companies and improve our manufacturing innovation system and capabilities based on a market-oriented and international standard. Thank you.

Reuters:

How well does the Ministry of Industry and Information Technology believe Chinese technology companies are doing in protecting data privacy? What measures will the ministry take to strengthen data privacy and protection? For example, how will China ensure that apps no longer share personal information with a third party? Thank you.

Xiao Yaqing:

Thank you for your question. First of all, the Chinese government has always attached great importance to the protection of personal information. I think that as far as 2020 is concerned, it may be the best year in history for protection because we are in a process of continuous improvement. Secondly, we should see that information technology is developing very rapidly, and due to reform and opening up, the implementation of accommodative and prudential regulation, and our encouragement of innovation, we have been able to provide a wide variety of personal information service applications, and the public have gained a lot of convenience in all aspects of their lives. But at the same time, we have also seen that there are still many technologies for personal information application that need to be rapidly improved and strengthened. Take mobile phones that everyone uses as an example. The number of mobile apps is very large. According to incomplete statistics, some say the number exceeds 3.5 million, and even conservative estimates put it to be more than 2.5 million. So, it's unimaginable that there are now more than 2 million apps available for a person's mobile phone, like the one held by that reporter. So as for how to supervise, we have intensified management and remediation efforts in accordance with development and safety requirements over the years. You have also noticed that the Ministry of Industry and Information Technology launched a special campaign on apps last year, and we have worked with other departments to carry out special campaigns on a variety of problems that the general public have lodged strong complaints about, such as problems concerning the microphone on the mobile phone and the communication address book in the mobile phone. Generally speaking, the effect of the campaigns is obvious. As requirements further enhance this year, we will continue such efforts, and work to ensure that the use of personal information must follow the principle of minimum requirement in the key areas that people have reported. 

In the process of personal information protection, apps that refuse to accept rectification must be resolutely removed from the app stores. At the same time, as the supervisor, we must also improve our technological capabilities. First, we must be able to detect loopholes in information protection, so that the general public can use the apps with ease. For another example, it is very difficult to find the cross ("x") in advertisements that people don't like to see in many apps. Therefore, we will make sure that information harassment is blocked. If you are not willing to watch an advertisement, then it should be very obvious how to turn it off. We still receive many public complaints about such problems like other advertisements appearing before the Reuters page you want to see. I believe that the Chinese government's attitude toward protecting personal information is resolute, the law is constantly improving, and the level of technology is constantly improving. We must stick to our actions, and we will make sure everyone feels a sense of gain.

Here I would also like to announce a phone number that deals with complaints about unhealthy and spam information on the internet - 12321. If there is any problem, you can report it by calling 12321. This is also helpful for our work. Thank you.

Asahi Shimbun:

The Ministry of Industry and Information Technology issued a draft version of the regulations on rare earth management to gather public opinions in January. Why did you choose this time? Is it to counter the United States? In addition, more and more people in Japan are worried that China may reduce exports? What is your response to this? Thank you.

Xiao Yaqing:

Thank you for your question. In January this year, the Ministry of Industry and Information Technology issued the draft version of the regulations on rare earth management to gather public opinions. Everyone knows that rare earth is a strategic resource. The purpose of the regulations is to regulate the industry in accordance with the long-term development strategy of rare earth and the demands of the market and address problems in our actual development. The regulations aim to allow the market to play a decisive role in the allocation of resources. Of course, the government must also play a good role in maintaining market order, relaxing or tightening regulation as is necessary. China is a large rare earth country with the most resources and the most export. Some countries say that we restrict exports, but most of the things you buy come from China. First of all, there is a phenomenon worthy of our attention. Our rare earth does not sell at a "rare" price, but at an "earth" price. This is because of vicious competition and competitive price reduction. Precious resources are wasted. Second, if you have the opportunity to take a look at our rare earth production enterprises, you will find there are indeed many environmental protection issues, and local people have very strong complaints. The rare earth market is good, so enterprises mine hard, dig hard, and refine hard. Therefore, there are many complaints about environmental protection. Third, why is rare earth called rare earth? Because it is a rare resource. Now they are being exploited in disorder and resources are being wasted. Some only harvest the richest areas. In Chinese language, it is called "digging out cabbage heart." With the best part taken away, the efficiency of the comprehensive utilization of resources is very poor. From a long-term perspective, after a few years of use, the comprehensive utilization of resources will also be problematic. Fourth, the development of rare earth has a lot of low-level repetitions, while high-level rare earth products are indeed relatively few, which is not conducive to technological innovation and sci-tech progress. Therefore, we should learn from Japanese companies in this regard. Many Japanese companies have done a lot of work on high-end rare earth products.

The Ministry of Industry and Information Technology, as regulator of the industry, needs to perform its duties well and do its own things well. I just talked about the international division of labor in the industrial chain. The globalization of the economy is a general trend. In this process, we are all closely interconnected. We need to join hands to respond to the various needs of resources, energy and products in the process of economic development and market development. We need to address our current problems towards healthy and sustainable development. Thank you.

Ta Kung Pao:

According to published data, China's industrial added value reached 31.31 trillion yuan in 2020. What is the MIIT's analysis and predictions for this year's industrial economy considering the huge uncertainties regarding the COVID-19 pandemic and the external environment? Also, what measures will you take to ensure steady development of industry and information technology?

Xiao Yaqing: 

Thank you for your questions. I'd like to invite Mr. Tian Yulong to answer you.

Tian Yulong:

Thank you for your questions. Since the unprecedented COVID-19 pandemic in 2020, General Secretary Xi Jinping has personally taken charge and planned the response. Under the strong leadership of the CPC Central Committee, we have made major strategic achievements in our response to COVID-19 and socio-economic development, which has become the focus of global attention. The economy has recovered steadily in China and the country has become the only major economy in the world to maintain positive growth. This is obvious to all. Generally speaking, China's economy will maintain its steady and long-term growth, as will its industrial economy going into 2021 under the strong support of the optimized manufacturing system, strong supporting services capacity and huge market potential. However, we still face challenges posed by uncertainties such as the pandemic and the economic situation, as well as other possible risks caused by breaks in the global industrial and supply chains.

In addition, while continuing to implement routine COVID-19 controls, some industries and enterprises are still recovering, and face pressure from operating difficulties. However, I believe they are gradually recovering. In general, China has demonstrated certain advantages in restoring its economy after experiencing severe challenges in the fight against COVID-19: First, we are under the centralized and unified leadership of the Party, and enjoy great strengths from the system of socialism with Chinese characteristics. In addition, we have learned valuable experiences from implementing routine COVID-19 controls. Significantly, the proposals for formulating the 14th Five-Year Plan (2021-2025) and the Long-Range Objectives Through the Year 2035 adopted at the Fifth Plenary Session of the 19th CPC Central Committee have not only drawn up blueprints for work in 2021, but also outlined plans for the following five or more years, which has provided strategic guidance for development of the industrial economy. In particular, Central Economic Work Conference held in December laid out a specific overall plan on the economy, while the approaching "Two Sessions" meetings will establish the main targets and tasks for socio-economic development in 2021. As the main department in charge of the development of industry and information technology, the MIIT will shoulder its responsibilities, remain confident, work with utmost concentration and overcome difficulties to implement all kinds of work in a down-to-earth manner. The main measures include:

First, strengthening innovations and breakthroughs in fundamental and key areas. Just now, Mr. Xiao mentioned that we would take modernizing the industrial chains and re-establishing the foundations of industries as our main work.

Second, stabilizing and optimizing the industrial and supply chain layout. As an important foundation of China's overall industrial economy and one our advantages, the industrial chain will be further upgraded through strengthening or supplementing.

Third, accelerating the shift to digitalization of manufacturing to promote integrated development. We will pursue innovative growth of industrial internet, map strategic routes of digitalized transformation, promote industrial digitalization and accelerate digital industrial growth.

Fourth, promoting high-quality development of the information communication industry. We have seen that the 5G network has so far achieved admirable progress. In the future it will be further upgraded in an orderly manner, and the deployment of the 6G network will be accelerated so as to foster optimized networks and maintain cyberspace security.

Fifth, expanding our support for small- and medium-sized enterprises (SMEs). We will focus on mitigating the financial difficulties of SMEs and protecting their lawful rights and interests so as to support enterprises of all sizes in pursuing development through collaboration with each other.

Sixth, taking solid measures on reform and opening-up. We will strengthen reforms to streamline administration and delegate power, and optimize the policy environment for the manufacturing industry, while supporting international cooperation between industries.

Seventh, ensuring that routine COVID-19 controls are implemented. The MIIT took up the responsibility of ensuring the availability of anti-epidemic materials. Our focus will transfer from safeguarding the sufficient supply of basic anti-epidemic materials last year, to the production and supply of coronavirus vaccines this year.

Finally, prioritizing the formulation of the 14th Five-Year Plan (2021-2025) with relation to the fields of industry and information technology. We will redouble our efforts to make specific plans in key areas and for key industries to usher in high-quality growth. That is all from me. Thank you.

New York Times: 

Looking over the next five years, as you look for technological self-sufficiency, how will you measure that? What will be your benchmarks? Will it be, for example, market share? Will it be trade balance in these sectors? How will you choose the measures? Thank you. 

Xiao Yaqing:

Thank you for your question. Your question is a rather general one, so I will try to answer that from the perspective of industry and information technology. When it comes to self-reliance in science and technology, first of all, we make our goals according to the needs of China's industry and information technology development. For instance, China boasts the largest industry and information technology market, and has been the largest goods trading country for many years, with imported products constantly increasing. I came across a figure a few days ago. China imported the first ten Boeing 707 aircraft after President Nixon visited China in 1972; we imported the one hundredth airplane in about 1986; and the one thousandth Boeing airplane in 2013. Therefore, our need is large. Technological self-reliance means we should have the technology and ability to produce a lot of things by ourselves. 

Second, people's increasing need for industry and information technological products has pushed forward our development. For example, 5G technology, high-speed railway, household chemical products, and normal home appliances are all developed in accordance with the needs of our people, which can also lead to technological self-reliance. 

Third, in a country of over 1.4 billion people, it is impossible to buy the better life aspired for by our people since nobody could supply it. We need to produce to meet our people's needs. The process of technological self-reliance is a process of satisfying our people and in my own view, contributing to the world. If everyone buys a certain product in the world, I believe that no one could supply it. Therefore, our self-reliance in science and technology contributes to the world. 

Fourth, there are no boundaries in science and technology, which is the common wisdom of the globe and humanity. Therefore, China's technological self-reliance is bound to make contributions to the global development of industry and information technology. Take fast developing 5G technology for example: we have built over 718,000 base stations by the end of 2020 and a complete systematical network will be built during the next five years. We are also planning to develop 6G technology, and discover the future of communication technology, and what kind of services it can offer. This process must require the gathering of knowledge, talent and innovation, and we are open and cooperative to improve people's living standard with the rest of the world. The purpose of self-reliance is not for our own good, but also as a way to help create a community with a shared future for mankind. The process can provide knowledge and positive energy for the globe and the result can serve all of humanity. 

This puts forward new and higher requirements for industry and information technology to implement self-reliance, and we have to do this work well one by one. We will also strengthen openness and cooperation with countries and regions including the United States, Europe and other developing countries. Thank you.

CRNTT:

As a strategic emerging industry, the development of 5G has always been of great concern. Please tell us about the current construction and development of 5G in China, and what other key initiatives will be taken by the Ministry of Industry and Information Technology to promote the development of 5G during the 14th Five-Year Plan period? Thank you. 

Xiao Yaqing:

Thank you for your question. China began its 5G network construction relatively early and has been leading the world in the number of total base stations, the quality of its network and the construction level of its communication equipment. We have world-leading enterprises. For example, Huawei, ZTE and other businesses have cooperated with globally renowned firms such as NOKIA and Ericsson. 

From a domestic perspective, we have just introduced that we have built over 718,000 5G base stations and invested over hundreds of billions of yuan in 5G, which now basically covers all cities above prefecture level across the country. We have arranged base stations in a standalone model, and provided services with large broadband and low latency with full use of network slicing technology. The scale of users has surged and the statistics change every day. Our 5G terminal connections exceed 200 million, probably the largest in the world. Satisfaction with 5G services is also higher than that of 4G compared with the same period of development. The average household usage of 5G mobile traffic is 50% higher than that of 4G. And the price per gigabyte is 4.4 yuan, down 46% in the past two years, and will decrease further in the future. Last year, the number of mobile phone terminals shipped reached 163 million units, with a large volume of 218 new models launched in the market. Innovative applications are increasingly abundant. In the consumer sector, 5G+Ultra HD and 5G+AR/VR technologies are widely used, and areas like gaming and entertainment, live events and residential services are being explored and practiced. Education and medical cares can provide services using 5G plus artificial intelligence and plus big data technology. During last year's epidemic prevention and control, our family education and smart medical care developed greatly. In the past two years, due to the rapid development of the "5G+industrial internet", there are now over 1100 projects under construction across the country, which have many very promising applications. I suggest you to have a look at COMAC in Shanghai, whose 5G application is very powerful. In the coal mines of Yangquan, north China's Shanxi province, the efficiency of underground production management and level of security have been constantly improved. Other good applications can also be found in Hunan Sany Heavy Industry Co., Ltd. and Xiamen port. 5G has greatly promoted the development of those sectors. 

Next, we will firstly cement the industrial foundation. Our country has a solid foundation to further achieve the development of 5G technology, with a batch of advanced big companies like Huawei. Secondly, we will deepen integrated application to promote technological innovation in various industries. Enterprises such as China Mobile, China Unicom, and China Telecom have done well in this regard. Thirdly, we will further open to the outside world and expand international cooperation. We should strengthen international communication and cooperation throughout the 5G development process, from R&D and application of technologies to the construction of facilities. During this upgraded process, we will build an industrial ecology for global coordination and a safer and more open environment for development with more mutual trust so that the benefits of innovative development can reach people all over the world. Of course, the development of the 6G industry, as I just said, is now in its exploratory stage. We are working with the international community in this regard to promote the development of common standards, long-term demands, and mature technologies. Next, we need to communicate and discuss with friends in this industry from all over the world to promote further development. Thank you.

Red Star News:

Recently, the MIIT has released a notice to support the establishment of national leading zones for new artificial intelligence (AI) applications in Beijing, Tianjin, Hangzhou, Guangzhou, and Chengdu. What support will these leading zones get? What role will they play in the innovative development of China's AI industry? What plans do you have next for the construction and development of the leading zones? Thank you.

Tian Yulong:

Thank you for your questions. As you just mentioned, AI technology serves as a major driver for a new round of technological revolution and industrial transformation. The establishment of leading zones is just one of the important measures we have taken to implement the decisions and plans of the CPC Central Committee and the State Council to accelerate the integration of AI and the real economy. 

In 2019, the MIIT approved the establishment of three leading zones in Shanghai, Shenzhen, and the Jinan-Qingdao area. These zones were built to conduct pilot trials in areas such as system and mechanism innovation as well as a superior policy environment and improved data sharing to explore new paths and gain experience. Recently, the MIIT approved leading zones in another five cities, namely Beijing, Tianjin, Hangzhou, Guangzhou, and Chengdu. Together, the eight zones covering the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, and the Chengdu-Chongqing region, play a role in the exploration, innovation, and demonstration of China's developing AI industry. We will step up our efforts in the following ways. 

First, we will explore new mechanisms and energize the market. We will energize market entities by enhancing policy guidance, improving the market environment, and strengthening the talent pool, so as to gain experience and explore successful development models.

Second, we will bolster the leading role of technological application and accelerate the introduction and application of AI technology. AI's strengths lie in big data, the huge available market, and enormous application. How should we leverage these advantages? With the government, enterprises, and the AI industry working together, we will jointly promote the practical application of AI technology, introducing it first to areas such as intelligent transportation, intelligent healthcare, and intelligent education to create new engines of growth and foster new growth drivers. 

Third, we will stay committed to following development with distinctive features and the creation of an intelligent economy in accordance with local conditions. The intelligent economy is now growing rapidly, and instead of applying the same measures to different conditions, we should carry out integrated development with distinctive features in accordance with different industries, local conditions, and areas. In this regard, different leading zones have offered their own development models. For example, Shanghai's development zone has been turned into a pacesetter for the national AI industry, while the zone in Shandong features AI and smart manufacturing, and the zone in Shenzhen boasts a hash rate platform. All of these zones have played an important role in the demonstration and promotion of the AI industry.

In general, leading zones are where local governments set up platforms and enterprises pursue integrated development. We will focus on reform, innovation, and pertinent policy support as the top priorities for the government's work. Also, we will promote technological applications and industrial integration, and ensure the government and the market fulfill their roles. As long as we step up our efforts in the above aspects, we will fully promote the development of the AI industry. Meanwhile, we will strengthen international cooperation to enforce a healthy, sustainable, and safe development of the AI industry around the world. Thank you. 

Economic Daily:

What has the Ministry of Industry and Information Technology (MIIT) done to help small and medium-sized enterprises (SMEs) tide over during the COVID-19 epidemic? Also, proposals for formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 pointed out that innovative SMEs should be supported to help them grow into important innovation sources. What measures will the MIIT take this year to strengthen the government's services for SMEs to cultivate their innovation capacities? Thank you.

Xiao Yaqing:

Thank you for your questions. Small and medium-sized enterprises are the most active and most numerous market entities in China. It has been reported that there are now 130 million market entities in the country, including more than 80 million self-employed individuals and over 40 million enterprises, among which, more than 95% are SMEs. Therefore, SMEs are the largest driving force in ensuring market stability and employment. The CPC Central Committee and the State Council have always attached great importance to the development of SMEs and have adopted numerous supportive policies. For example, in the fight against the COVID-19 epidemic last year, various parties introduced many supportive measures for SMEs facing difficulties, which helped boost their development. Last year, the MIIT, together with other departments, implemented the decisions and arrangements of the CPC Central Committee and the State Council, which can be simply summarized as "subtraction in three aspects" and " addition in three aspects."

The three aspects of subtraction relate to tax, arrears, and financial cost. Last year, we made further tax and fee cuts of more than 2.5 trillion yuan, which greatly supported the development of SMEs. We also cleared overdue payments for private enterprises and SMEs, and over 161 billion yuan in non-negotiable payments. Financial institutions and enterprises have been very supportive of SME's advancement. Last year, the average interest rate of loans introduced to SMEs, especially small and micro enterprises, stood at 5.08%, down 0.8 percentage points from the beginning of last year.

The three aspects of addition relate to services, digitization, and financial scale. Last year, more than 90,000 events were held to serve SMEs across China, providing services for over 6.7 million applicants and reaching enterprises 50 million-plus times. Meanwhile, we carried out dedicated campaigns to facilitate the digitization of SMEs and organized activities to promote business startups and innovation in manufacturing, which has driven the cultivation of more than 30,000 SMEs characterized by professionalization, refinement, specificity, and novelty in various places as of last year. Among them, a total of 1,832 "little giant enterprises" (outstanding examples among SMEs that feature professionalization, refinement, specificity, and novelty) had been developed. The loans for small and micro enterprises supported by financial institutions exceeded 15 trillion yuan, up 30.3% year on year, which is a huge increase. With so many active SMEs, they cover a wide range of fields. In addition to national policy support, local governments where SMEs are active should also provide more precise supportive policies for the development of these enterprises.

For MIIT, we want to focus on the work of "three, two, one" for the SMEs' development. The so-called "three" relate to the further consolidation of foundations in three important areas: policy system, service system, and development environment. We will accelerate the formulation of the SME development plan during the 14th Five-Year Plan period, further improve the system supporting the development of SMEs, and upgrade the SME service system to combine public services, market-oriented services, and public benefit services. These service institutions should also be guided to provide standardized, refined, and personalized services.

"Two" indicate that we will concentrate on the two key points of financing, and rights and interests protection, and seek solid outcomes. We will strengthen the synergy between the government, financial institutions, and enterprises, deepen cooperation in production and financing, incentivize financial institutions to increase credit supplied to SMEs, and further reduce financial costs. We witnessed how banks and other financial institutions made numerous efforts last year to further widen direct financing channels.

"One" relates to focusing on the improvement of SMEs' innovation capacities and assisting SMEs to grow into sources of innovation. A large proportion of innovation in the past came from SMEs, so we should in a phased way improve systems which cultivate innovative SMEs. We will strive to foster more than 10,000 "little giant enterprises" characterized by professionalization, refinement, specificity, and novelty at the national level within three to five years, adding to the existing 1,800-plus already in operation, as well as 100,000 provincial-level small and medium-sized enterprises of this kind and one million innovative small and medium-sized enterprises. Thank you.

Yicai:

Mr. Xiao just responded to issues about various industries such as chips and new energy vehicles. We are also very concerned about the development of the steel industry. According to the 2021 National Conference on Industry and Information Technology, China will resolutely cut the output of crude steel this year. Is there a specific target? Industry watchers expect that the demand for crude steel will exceed 1.1 billion metric tons this year. On the one hand, we need to reduce the output of crude steel, but on the other hand, demand is increasing. Is there any contradiction? How can we deal with that? Thank you.

Xiao Yaqing:

Thank you for your questions, which are indeed issues that many are concerned about. First, since 2016, major headway has been made in the five priority tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening points of weakness. In particular, China has reduced steel production capacity by 170 million metric tons, making significant progress in reducing steel production and capacity. This year, we will continue to work on it. General Secretary Xi Jinping announced at the 75th UN General Assembly that China aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. We will strive to achieve these high targets, during which the steel industry should take the lead.

There are several reasons why steel is in great demand. First, the rapid economic recovery, the resumption of production and new construction in various industries, are all generating a very large demand for bulk raw and auxiliary materials, including steel. It is also important to see that after the global recession last year, the economy is likely to have some good news this year, so expectations are rising and demand is further increasing.

Second, the per capita use of iron and steel is still in the development process, compared with total economic output. For example, cement, stone, and bricks and tiles are the main materials for construction. Steel consumption is not particularly high, especially in the vast rural areas. In addition, regarding transport, judging from the current number of cars per hundred people and the fact that China's per capita GDP exceeded 10,000 U.S. dollars benchmark, there's plenty of scope for growth. In this sense, the demand for steel is very strong.

Third, from the perspective of energy conservation and emission reduction, the output of iron and steel should be greatly reduced. In terms of the amount, the MIIT is cooperating with relevant national departments to formulate plans. At the same time, we will raise standards and improve the performance of the product, so that the unit steel consumption is further reduced with the total amount remaining unchanged. For example, we will further enrich our varieties of steel and improve their strength, toughness, and quality. In the process of cutting the output, we should pursue intensive development. If we don't exert control over the next few years, the total output of steel may be higher than it is now. Currently, resources are still distributed and the degree of dependence on foreign sources of raw materials and energy is still very high. All these problems need to be solved.

Finally, energy conservation and emission reduction are other key tasks. At present, the unit emission of carbon dioxide per metric ton of steel is declining, but the total amount is still relatively large. The total coal consumption per metric ton of steel has declined. The global average is 575kg of coal per metric ton of steel, but China's figure is 545kg. There is still potential to be tapped in this area given our large total amount. We must take energy conservation and emission reduction as important tasks of the steel industry and continue our efforts.

Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao, Mr. Tian and friends from the media. Today's press conference is hereby concluded. Goodbye, everyone.

Translated and edited by Zhang Jiaqi, Fan Junmei, Zhang Tingting, Huang Shan, Xu Xiaoxuan, Wang Yanfang, Wang Yiming, Li Huiru, Guo Xiaohong, Li Xiao, Wang Qian, Zhu Bochen, Lin Liyao, Wang Wei, Yuan Fang, Zhang Rui, Liu Jianing, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Wang Zhigang, minister of science and technology

Xu Jing, director-general of the Department of Strategy and Planning of the Ministry of Science and Technology

Xie Xin, director-general of the Department of Resource Allocation and Management of the Ministry of Science and Technology

Ye Yujiang, director-general of the Department of Basic Research of the Ministry of Science and Technology

Wu Yuanbin, director-general of the Department of Science and Technology for Social Development of the Ministry of Science and Technology

Chairperson: 

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date: 

Feb. 26, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to the State Council Information Office (SCIO) press conference. Innovation is the primary driving force behind high-quality development and the strategic underpinning for the fostering of a new development paradigm. Today, we have invited Mr. Wang Zhigang, minister of science and technology, to brief you on issues around making China a country of innovators and supporting the fostering of a new development paradigm, and to answer some of your questions. We also have with us four directors-generals at the Ministry of Science and Technology (MOST): Xu Jing, director-general of the Department of Strategy and Planning; Xie Xin, director-general of the Department of Resource Allocation and Management; Ye Yujiang, director-general of the Department of Basic Research; and Wu Yuanbin, director-general of the Department of Science and Technology for Social Development.

Next, I will give the floor to Mr. Wang.

Wang Zhigang:

Ladies and gentlemen, friends from the media, good afternoon. First, I would like to thank our friends from the media for your interest in and great support of the science and technology sector. I am glad to meet with you before the annual meetings of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) to exchange information on building China into a country of innovators.

At the 19th National Congress of the Communist Party of China (CPC) in 2017, Xi Jinping, general secretary of the CPC Central Committee, clearly proposed making China a country of innovators. This is a requisite for building a modern country and a major task for implementing the new development concept and fostering a new development paradigm. During the fifth plenary session of the 19th CPC Central Committee, it was proposed that we should adhere to the core position of innovation in China's overall modernization drive, and taking self-reliance in science and technology as the strategic support for national development. This provides important guidelines for making China a country of innovators in the new era. During the 13th Five-Year Plan period (2016-2020), China made decisive achievements in building an innovation-driven country. Scientific and technological strength increased to a new level, reform of the science and technology system and governance were deepened, an enabling system for innovation was further developed, and the environment for innovation was improved. This provided strong support for economic development, improvements in people's livelihoods, and national security. Science and technology are playing an increasingly important role in implementing the new development concept and fostering a new development paradigm. It can be highlighted in the following six aspects.

First, we have systematically promoted basic research and achieved breakthroughs in core technologies in key areas. China's science and technology innovation capacity have increased significantly. For the first time, investment in basic research accounted for more than 6% of spending on research and development (R&D), including setting up 13 national applied mathematics centers. Original innovations have been developed in quantum information, iron-based superconductivity, stem cells, amid other areas. Progress has also been made in the R&D of high-speed railways, key components and basic software. Breakthroughs have been made in major scientific projects such as the Chang'e-5 (lunar probe) and Fendouzhe (deep-sea manned submersible). The development of national laboratories has been accelerated. The system of key national laboratories has been restructured. A group of national technological innovation centers were established, with enterprises as the main players.

Second, we have promoted the application of scientific and technological achievements in the development of the economy and society in an all-round manner, so as to foster "new growth drivers" for high-quality development. Remarkable development has taken place in key industries, led by major projects. Significant achievements have been made in mobile communications, new drug development and nuclear power. Technological support has been provided for major projects such as the large-scale application of 5G and the building of Hong Kong-Zhuhai-Macao Bridge. The Beidou navigation satellite network now provides global coverage. The application of new energy vehicles and artificial intelligence has been accelerated. The number of high-tech enterprises has exceeded 200,000. International science and technology innovation centers in Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area, 21 national innovation demonstration zones, and 169 national new- and high-tech development zones have helped speed up the formation of new areas of growth, growth belts and growth poles. Science and technology have supported the defining victory in the battle against poverty. Technicians have been sent to all registered poverty-stricken villages to offer technological assistance and promote business start-ups as a means to create more jobs. In 2020, around 167,000 college graduates were employed as research assistants.

Third, we have increased the pool of qualified scientific and technological personnel. Talent development has been accelerated. The full-time equivalent of R&D personnel in China reached 4.8 million man-years. The national science and technology programs and key laboratories have bolstered support for young talented personnel. The number of scientific and technological leaders is increasing. A group of outstanding scientists have won important international awards such as the Fritz London Memorial Prize. A unified work permit and visa system for foreign talent has been adopted, and has handled nearly 650,000 work permits.

Fourth, we have deepened reforms of the science and technology system in key areas and formed a "new ecology" for innovation and entrepreneurship. The reform targets have been preliminarily achieved in the management of science and technology programs, the application of scientific and technological achievements, and the sharing of resources. We have adopted an open competition mechanism in the first batch of pilot projects to select the best candidates. A science and technology innovation board was launched at stock market to provide a channel for connecting technology, industry and finance. Efforts have been made to reduce the burden on scientific research personnel and change the current academic evaluation system in key areas that is over-reliant on published papers, academic titles, educational background and awards. We have implemented a series of documents on promoting integrity and ethics in scientific research, which has brought about positive changes.

Fifth, we have actively integrated into the global innovation network, and new advances have been made in scientific and technological cooperation. We have established innovation dialogue mechanisms with many countries, and conducted joint research with more than 50 countries and regions. We have fully participated in major international scientific projects such as the International Thermonuclear Experimental Reactor. Under the Belt and Road Science, Technology and Innovation Cooperation Action Plan, we have supported more than 8,300 young foreign scientists to work in China and established 33 joint laboratories. We have smoothed the entire process to ensure the central government's scientific and technological research funding can be extended to the Hong Kong Special Administrative Region (SAR) and Macao SAR.

Sixth, we have acted swiftly and tackled the scientific and technological difficulties in emergent response to the COVID-19 pandemic, making China's new contributions while addressing common global challenges. We have mobilized a national scientific and technological system that focuses on areas of clinical treatment and medicines, vaccine research and development, test equipment, and reagents. We finished the genome sequencing of the COVID-19 virus in one week and developed and approved COVID-19 test kits in 14 days. Vaccine development via five technological approaches is being advanced simultaneously. Seven vaccines have been undergoing phase III clinical trials and four have been approved conditionally. Eleven medicines or treatments have been listed in the country's diagnosis and treatment scheme for COVID-19. The country has joined 10 WTO working groups and carried out scientific and technological exchanges and cooperation with American, European, Asian, African, Latin American, and the Caribbean countries during the fight against the pandemic, sharing the latest results and providing Chinese solutions.

These results did not come easily. They have been attributed to the strong leadership of the CPC Central Committee and the State Council, as well as the sacrifice and hardworking of a great number of scientific researchers. Here, on behalf of the Ministry of Science and Technology, I would like to express the highest respect for and sincere gratitude to all those in scientific and technological fields, especially those scientists and researchers working on the front lines of the COVID-19 pandemic. 

We should not only look back on our achievements but also have a clear understanding of what comes next. On one hand, the support of science and technology towards social and economic development is not enough, and some weak points still exist. To promote the country's social and economic development, improve civil affairs, and ensure national security, our demands for science and technology have never been as important and urgent as they are today. On the other hand, the outlook and space for scientific and technological development have no limits. Our understanding of the regularity of scientific and technological innovations and the pursuit of their diffusion and permeation is endless. We should work hard and further increase the all-round support and guidance of science and technology for the economy, industries, society, and security, and strive to contribute more Chinese power and results to the global scientific and technological development.

Those who dream big can succeed and those who embrace difficulties can progress. This year marks the beginning of the 14th Five-Year Plan Period (2021-2025). We will stick to the four principles of targeting the global science frontiers, serving the main economic battlefield, striving to fulfill the significant needs of the country and benefiting people's lives and health. We will strengthen strategic support for science and technology, adhere to self-reliance and self-improvement in science and technology, and give full play to its fundamental role in promoting high-quality development and in building the new development paradigm to achieve superior performance as a gift for the 100th anniversary of the founding of the CPC. Now, I will take any questions you might have. Thank you.

Chen Wenjun:

Thank you, Mr. Wang. The floor is open for questions. Please identify your news outlet before asking your question. Thank you.

CCTV:

This year marks the beginning of the 14th Five-Year Plan Period (2021-2025). How well have we met our targets for scientific and technological innovation during the 13th Five-Year Plan Period (2016-2020)? Are there any weaknesses? Additionally, are there any new arrangements from the Ministry of Science and Technology to support the building of the new development paradigm? Thank you. 

Wang Zhigang:

Thank you for your questions. As I mentioned in my opening remarks, our scientific and technological strength and innovation abilities have been greatly improved since the 13th Five-Year Plan period (2016-2020), achieving historic, systematic, and structural changes. The total R&D investment increased from 1.42 trillion yuan in 2015 to an estimated 2.4 trillion yuan in 2020. Last year, China's spending on R&D was estimated to be 2.4% of its GDP. Specifically, spending on basic research was estimated to exceed 150 billion yuan in 2020, almost double that of 2015. As estimated, the contribution of scientific and technological advances to economic growth would exceed 60% in 2020, meeting the expected target. Citizens with scientific qualities accounted for 10% of our population. According to the "global innovation index" released by the World Intellectual Property Organization, China rose from 29th place in 2015 to 14th in 2020. On the whole, we have made decisive achievements in building China into a country of innovators.

Certainly, we should note that weaknesses still exist. Our innovative ability can't meet the need for high-quality development. First, key technologies are not independent and basic research and original research is weak. Second, the supply of high-quality technological results is not sufficient and can't support the industrial and supply chains well. Meanwhile, innovative abilities among enterprises are not good enough. Third, the overall efficiency of the innovative system is not high enough. There is still room to improve concerning the integration of colleges, research institutions, and enterprises into a whole innovative system, the sourcing of top talents and high-level teams, as well as the conduct and academic atmosphere within the science and technology field. 

During the 14th Five-Year Plan period (2020-2025), we will stick to the four principles of targeting the global science frontiers, serving the main economic battlefield, striving to fulfill the significant needs of the country and benefiting people's lives and health. We will emphasize the promotion of high-quality development in building the new development paradigm, and fully display the supporting role of technological innovation. First, to promote the high-end development of the industrial chain, we will step up breakthroughs in key technologies, intensify the arrangement of frontier technologies, and establish a batch of key technological projects in the areas of artificial intelligence, quantum information, and bio-breeding. Second, focusing on supporting real economic development, we will push forward the large-scale application of technological advances. Relying on national self-independent innovation zones and high-tech development zones, we will foster a number of clusters for high-tech industries and high-tech businesses, and step up the development of new forms of business and new models to strengthen new drivers in growth. Third, in order to safeguard people's health and lives, we will enhance R&D and application in the prevention and treatment of major diseases, as well as innovative medicines and medical equipment. Fourth, to realize our goals in cutting carbon dioxide emissions and achieving carbon neutrality, we will advance technological breakthroughs and promote their application in pollution prevention and control, efficient utilization of energy and resources, and combating climate change. Fifth, to improve the overall efficiency of the innovative system, we will put emphasis on stimulating the vitality of talents, launch a new round of reforms in the scientific and technological system, and improve the innovation environment.

We hope that through the next five years' hard work and unremitting efforts, we will notably improve our national technological innovative abilities and the overall efficiency of the innovation chain, so as to better support high-quality development and build a new development diagram. Thank you.

Yicai:

General Secretary Xi Jinping stressed that talent is the fundamental source of national scientific and technological innovation. I noticed that China has done lots of work to reform the science and technology evaluation system and inspire enthusiasm for innovation. You just mentioned that great progress had been made in reducing the burden of professionals in the sector and reforming the former evaluation standards. Can you add further detail for us? Also, what kinds of reforms will be introduced during the 14th Five-Year-Plan period? Thank you.

Wang Zhigang:

Thanks for your question. Innovation-driven development is essentially talent-driven development. Talent plays a decisive role in our push for innovation-driven growth and development in science and technology. It is also the principal part of various types of research. That's why we consider talent the most important factor. In recent years, we have put researchers first, relied on scientific and technological personnel, and served key players in innovation, such as universities, research institutions and enterprises. Specifically, we have built a talent policy system based on trust, with equal emphasis on incentives and constraints. We have also been carrying out classified evaluation. We value the effectiveness of tackling major problems in economic and social development and sci-tech progress, and also advocating for a type of peer review under which the judges know the project well. We will continue to focus on the ability, quality, effectiveness and contribution of scientific researchers; resolutely reverse the undesirable tendency of only placing importance on published theses, titles, educational background and awards; make efforts to reduce the burden of scientific researchers; create a good academic ecology; and motivate more scientific researchers to devote themselves to scientific research and carry out scientific research with dedication. We have built a diversified science and technology ecology and provided customized services for researchers in accordance with the different rules and characteristics of basic research, applied basic research, technological innovation, and the commercialization of scientific and research findings. At the same time, we have been actively advancing classified evaluation, with General Secretary Xi Jinping's requirements as the standard. He has said that scientific and technological development must target the global frontiers of science, serve the main economic battlefield, strive to fulfill the significant needs of the country and benefit people's lives and health.

First, we have been fighting against the four wrongful practices in evaluation mentioned above. We are against using published theses as the only evaluation standard. Theses themselves are good things and research needs to be published when there are new findings. However, if they are treated as the sole standard, we have the opposite problem. So, while we don't want published research to be the only standard, we still encourage young people to write papers when they start their research. It's a good thing if they are capable of delivering papers. Scientists of high caliber should produce high-quality theses, but they must be their own findings.

Second, we are breaking the practice of simply linking the titles of scientific and technological talents to the evaluation results. Many top scientists are academicians or professors. Yet when they started their research years ago, they had no such titles. We have to rely on the youth to advance the development of China's science and technology and that of mankind. It will constrain emerging talent if we only place importance on titles. We have to value them for their scientific research and findings, and not just their titles.

Third, we have been reducing the burden on researchers, enabling them to focus on scientific research. The government needs to serve them, rather than interrupt them. We have simplified planning schedules, streamlined reimbursement for expenses, reduced planning inspections, and promoted the sharing of information. Generally speaking, all these reform measures have truly reduced the burden on researchers and provided a targeted service for them. Thanks to the coordinated efforts of related departments, the reform of the talent system and evaluation work has seen sound development, and researchers now have an enhanced sense of gain. Surveys from our ministry and the media last year all showed that the seven burden-reducing programs launched by the MOST have been well-received among researchers, and ranked in the forefront in terms of how well they were reflected among the various reforms.

In the future, we will follow the deployments of the fifth plenary session of the 19th CPC Central Committee and continuously deepen reform which is for professionals in the science and technology sector and relies on them. The MOST will hear opinions, suggestions, and complaints from researchers both regularly and irregularly through symposiums or surveys, and take appropriate measures to maximize their sense of gain. The creativity of talents will then be further stimulated, and the building of a talent evaluation system complying with rules of sci-tech development and talent cultivation will be sped up on the basis of diverging from wrongful practices. We will develop our work style and study style in the science and technology field, strengthen our overall planning and synergize sci-tech work with education. We will also refine the income distribution policy designed to increase knowledge value, reinforce the cultivation of young sci-tech personnel, and build up more world-class innovative teams and leading talents so as to enhance the talent basis for sci-tech self-reliance. Thank you.

Bloomberg:

I have a little bit multi-pronged questions. First of all, I'd like to ask about semiconductors. How will China support the development of semiconductors during the 14th Five-Year Plan? What kind of projects are considered key in the next five years? What kind of measures will the government take to support China's chip R&D and manufacturing? More broadly, I'd also like to ask that the U.S. government has blocked business ties between some of China's companies and their U.S. chip suppliers, and some scientific collaboration between Chinese and American universities have also faced scrutiny, what's the Ministry's plan to resolve these issues in relation to the U.S. and their actions on not only semiconductor suppliers but also researchers? Thank you.

Wang Zhigang:

Thanks for your questions. Your first question is about how China will support the development of semiconductors. It can be said that in the information age, the semiconductor and integrated circuit industry is a core industry. It is a strategic, fundamental and pioneering industry that supports economic and social development, and a very important industry to lead the next round of scientific and technological revolution and industrial transformation. The Chinese government has always attached great importance to the semiconductor industry. In July last year, the State Council promulgated several policies for the high-quality development of the integrated circuit industry and the software industry in the new era, covering fiscal measures and taxation; investment and financing; R&D; import and export; talents; intellectual property rights; market applications; and international cooperation. In addition, the semiconductor industry is a globalized industry and the Chinese government has always upheld the principle of open development and win-win cooperation, making full use of global resources to continuously promote technological innovation and jointly promote the development of the global integrated circuit industry.

At present, China is the world's largest and fastest-growing integrated circuit market. We certainly hope that globalized cooperation will continue,but at the same time, China itself will continue to strengthen independent innovation. We will continue strengthening scientific and technological innovation in integrated circuit-related fields, improve technological innovation capabilities and the quality and autonomy of industrial development.

In terms of scientific and technological R&D, we will mainly focus on some key core technologies and cutting-edge research in integrated circuits, software, high-end chips, and new-generation semiconductor technologies. We will offer support via the national plan in key R&D; motivate companies to be key players in innovation; and promote the deep integration of industries, universities, and research institutes, to improve the environment and platforms for innovation in the integrated circuit sector and other fields. We will also cultivate talents to improve innovation capabilities.

As you mentioned earlier, there are now some problems with the cooperation between China and the U.S., which is not what we would like to see. We still hope to continue international scientific and technological cooperation in the semiconductor field and we value further international cooperation in the integrated circuit and software sectors. We make active efforts to create a good environment for global companies to invest and develop in China. We also encourage Chinese and overseas business communities to strengthen cooperation. During cooperation, we will also strengthen intellectual property rights protection; strictly implement the protection system for intellectual property rights in the integrated circuit and software sectors; put in place stricter punishments for intellectual property infringements; and vigorously develop intellectual property rights services related to integrated circuits and software.

In short, the integrated circuit industry is an important foundation for China's high-quality economic development, and it must be the focus of China's R&D as well as scientific and technological work. Next, we will actively promote international scientific and technological cooperation among companies, universities, research institutes, and other innovative entities based on mutual benefit, to enhance the scientific and technological innovation capabilities in integrated circuit industry. We will also strengthen China’s independent R&D capabilities in the field. We hope to have more outcomes to not only serve China's information industry and applications, but also support and serve the global integrated circuit industry. Thank you.

Nikkei:

China's basic research funding nearly doubled during the 13th Five-Year Plan period. Does the Ministry of Science and Technology have any growth goals for it during the 14th Five-Year Plan period? Will it be more than doubled?

Ye Yujiang:

In recent years, China has attached great importance to basic research. Its basic research funding practically doubled during the 13th Five-Year Plan period, reaching 133.6 billion yuan in 2019, surpassing 6% of the total R&D expenditure for the first time. It is expected to exceed 150 billion yuan in 2020. The overall growth rate reached into double digits at 16.9% during the 13th Five-Year Plan period. We will take further measures to increase investment in basic research during the 14th Five-Year Plan period. First, the central government will continue to increase investment. Second, we will guide companies and society to invest more in it. In this regard, we will formulate some motivating policies. Thank you.

Science and Technology Daily:

In recent years, there have been many new policies to reform China's science and technology innovation system and mechanisms. I am concerned about the reform of the management of science and technology planning projects. What's the current progress of reforms in that area? What specific plans do you have to select the best candidates to lead key research projects and funding non-consensus projects? Also, you have mentioned young scientists, so what are your favorable policies for them? Thank you.

Wang Zhigang:

Let's invite Mr. Xie to answer these questions.

Xie Xin:

Thanks for your questions. The national science and technology plan is an important vehicle for the government to organize scientific and technological innovation activities, and many of the major scientific and technological achievements introduced by Mr. Wang just now were formed with the support of our science and technology programs. During the 13th Five-Year Plan period, we worked hard in accordance with the CPC Central Committee's decisions and arrangements to address problems that many people had reported in the science and technology industry, such as repetition, lack of common goals and transparency, and inefficiency. In response, we formulated a new planning system, and established a more transparent and professional management and operation mechanism. In particular, we strengthened the coordination among government departments and that between government departments and provinces. We have achieved good results in setting common scientific research goals, designing tasks, and implementing projects. We plan to continue deepening reforms during the 14th Five-Year Plan period to further motivate scientific researchers and improve the overall performance of our science and technology plan.

In terms of specific reform measures, the first is regarding what you said just now about "selecting the best candidates to lead key research projects," which is a top priority in the 14th Five-Year Plan's goal to reform the science and technology program. In fact, during the vaccine research and development project last year, we already implemented such a model. The "best candidates" are actually the clinical task approval documents. When an approval document is obtained, we will provide support in stages and mobilize the research and development forces of all aspects of society. As a matter of fact, the core reform is to design our R&D tasks based on the urgent needs of the high-quality development of our economy and society. In the process of implementation, responsibilities are consolidated through reforms and via something akin to "military orders." Eventually, users will be required to evaluate our results so that our science and technology plans are able to focus more on national needs and strengthen our ability to tackle tough problems.

While organizing major R&D tasks, we also pay attention to the funding of non-consensus projects. In fact, the difficulty of this reform is that as we support non-consensus projects, we need to break the traditional practices of the past, and have a certain degree of tolerance for non-consensus projects. We will innovate in all aspects of the discovery, selection, funding, and evaluation of non-consensus projects, and truly support a batch of non-consensus projects that are groundbreaking and may have a huge impact on future industrial changes.

The third is to support young people. During the 14th Five-Year Plan period, the young scientist project should be fully promoted and implemented for the national science and technology plan. In fact, young people are already the main force in the implementation of our current science and technology plan, but we must build a higher and larger platform for them in the 14th Five-Year Plan period. We must also let outstanding young scientific researchers take the lead, let them undertake tasks independently, organize national projects, boldly innovate in the project implementation process, and at the same time train a reserve of young researchers who can lead the way in China's future scientific and technological development. All these reform measures will be implemented in the first batch of projects during the 14th Five-Year Plan this year, and we welcome everyone to continue to pay attention to this. Thank you.

Hong Kong Economic Herald:

My question is for Minister Wang Zhigang. In the first year of the 14th Five-Year Plan, what new measures will the Ministry of Science and Technology take to support technological innovation in Hong Kong and the Guangdong-Hong Kong-Macao Greater Bay Area? Thank you.

Wang Zhigang:

Thank you for your question. First of all, Hong Kong's scientific and technological strength is an important part of the national innovation system and national strategic scientific and technological strength. I myself have been to several universities, incubators, and youth entrepreneurship high-tech zones in Hong Kong and I can say that they do have a strong sense of science and enthusiasm for technological innovation as well as great enthusiasm and incentive to jointly promote national technological innovation with the mainland. Our work is to promote the construction of an international science and technology innovation center in the Guangdong-Hong Kong-Macao Greater Bay Area under the guidance of the central government's work policy on Hong Kong, support Hong Kong's construction of an international innovation and technology center, and help Hong Kong's scientific and technological development integrate into the national innovation system and into the overall development of the country.

First, we will further expand the central government's science and technology fiscal plan to Hong Kong and Macao. We will also support Hong Kong's strong scientific research institutions and scientists to take the lead or cooperate with mainland institutions to undertake national basic research tasks, support Hong Kong and Macao scholars to participate in international scientific programs and projects, participate in international scientific and technological organizations, and play a greater role generally.

Second, we will promote substantial scientific and technological cooperation between the mainland and Hong Kong and Macao by taking scientific research project cooperation as an important starting point. We will continue to organize and implement joint R&D projects funded by the mainland and Hong Kong, further strengthen the top-level design, focus on people's livelihood and industrial applications, and encourage Hong Kong, Macao, and the mainland to carry out industry-university-research cooperation.

Third, we will vigorously support Hong Kong's construction of a national-level scientific research platform carrier. We'll strengthen the collaborative innovation of the two sides, deploy and build national laboratories, comprehensive national science centers, and national technological innovation centers in the Greater Bay Area, and attract high-level scientific research institutions from Hong Kong and Macao to participate. We will also promote the construction of a number of scientific and technological cooperation bases with Hong Kong and Macao in the mainland, especially in the Greater Bay Area.

Fourth, we will deepen scientific and cultural exchanges, support the innovation and entrepreneurship among young people in Hong Kong and Macao, encourage strong and willing universities and scientific research institutions in Hong Kong and Macao to join the national science and technology entrepreneurship research and training center system, support Hong Kong to continue to host activities for Hong Kong entrepreneurial youth to come to the mainland, strengthen exchanges and cooperation with mainland entrepreneurial incubators, and provide a development platform for outstanding Hong Kong scientific and technological personnel to launch their careers. We are planning the establishment of a Hong Kong youth science and technology cultural exchange program, helping young scientific and technological personnel from Hong Kong study and research at mainland scientific research institutions as well as create more opportunities for Hong Kong youth to develop in the mainland, especially in the Greater Bay Area.

I want to stress this in particular. Every time I go to Hong Kong and Macao, some experts and scholars in their universities, research institutions, and enterprises are indeed very enthusiastic about participating in scientific and technological innovation throughout the motherland and in the mainland, and they are very capable. Their laboratories, their achievements, their professional knowledge, professional ethics, and international vision all impressed me deeply. In our work, we must unswervingly regard Hong Kong and Macao's scientific and technological strength as an important part of national scientific and technological strength. This in turn will create more opportunities for them to participate in national scientific and technological innovation and development. Here, I would also like to express my gratitude to them. Thank you.

China Review News:

During the 13th Five-Year Plan period (2015-2020), China vigorously promoted the building of international science and technology innovation centers in Beijing, Shanghai, and the Guangdong-Hong Kong-Macao Greater Bay Area. This year marks the first year of the 14th Five-Year Plan, and what are China's considerations in planning regional innovation highlands and promoting the building of science and technology innovation centers? Thank you.

Wang Zhigang:

Mr. Xu will answer this question.

Xu Jing:

Thank you for your question. As we all know, this year is the first year of the 14th Five-Year Plan. The fifth plenary session of the 19th CPC Central Committee clearly stated that we should make plans to build regional innovation highlands and support the development of Beijing, Shanghai, and the Guangdong-Hong Kong-Macao Greater Bay Area into international science and technology innovation centers. During the 14th Five-Year Plan period (2021-2025), we will strive to create the main driver for science and technology innovation, foster regional innovation growth sources with distinctive features, and form a regional innovation pattern featuring clear main functions, complementary advantages, and high-quality development. We have three aspects to consider regarding this structure.

First, we should continue to support the development of Beijing, Shanghai, and the Guangdong-Hong Kong-Macao Greater Bay Area into international science and technology innovation centers. We must also strengthen efforts to plan major national innovation bases and platforms and work hard to deepen reform of science and technology systems and policy innovation. In this regard, we hope that these three areas can play a leading role in policy innovation, research exploration, and promote the positive interplay and organic integration of science and technology and industry and finance. Through these, we hope companies take the lead in creating sources for science and technology innovation in China and form important driving forces for high-quality development.

Second, we need to support regions where conditions permit the establishment of regional innovation centers and build sources for regional innovation. The key is to strengthen the growth of national high-tech industrial development zones and independent innovation demonstration zones. In fact, national high-tech development zones have played an increasingly important role in high-quality development across the country in recent years. In 2020, facing the unfavorable environment produced by the COVID-19 pandemic, the 169 high-tech industrial development zones nationwide registered an operating income of 41.8 trillion yuan, up 8.4% from 2019. Therefore, during the 14th Five-Year Plan period, we will focus on promoting the high-quality growth of national independent innovation demonstration zones and high-tech development zones, optimize services for innovation, gather high-end resources, cultivate competitive industrial clusters and innovative enterprises, and build high-tech parks and innovative characteristic parks with international influence. At the same time, we will enhance support for the advancement of agricultural science and technology parks and agricultural high-tech development zones. We will take actions to upgrade science and technology innovation at the county level and promote the transfer, commercialization, and application of scientific and technological achievements.

Third, we must improve mechanisms for coordinated regional innovation advancement. In accordance with the national strategy for regional development, we will begin to promote the large-scale development of the western region, the full and all-around revitalization of the northeast, the rise of the central region, and the opening up of Hainan with the support of science and technology. We will increase support for scientific and technological work in old revolutionary base areas, border areas, and areas inhabited by ethnic minorities. We will speed up promoting high-tech development zones in the central and western regions to upgrade their innovation capacity and levels. We will support growing demonstration zones for science and technology cooperation between the eastern and western regions and actively explore and improve market cooperation models, such as offshore research and development centers, offshore science and technology business incubators, and ”enclave economy parks”.. Simultaneously, we will continue to deepen the Xinjiang "four-party cooperation mechanism,” which was vigorously promoted during the 13th Five-Year Plan period. Under this mechanism, the four parties of Xinjiang Uygur Autonomous Region, the MOST, the Chinese Academy of Sciences, and Shenzhen will cooperate and promote the development of the western region. We will also deepen cooperation between Gansu province and Zhangjiang High-tech Park in Shanghai, Ningxia and the six eastern provinces and cities (Beijing, Tianjin, and the provinces of Shandong, Jiangsu, Zhejiang, and Fujian), Guiyang city in Guizhou province and Zhongguancun Science Park in Beijing, to strengthen the innovation-driven development of the western region and create a new driving force in innovation-driven growth. Thank you.

Cover News:

Since the outbreak of the COVID-19 pandemic, scientific research has played an important role in fighting the spread of the virus. What new progress has been made in China's research and development of vaccines and medicine? What are the long-term plans for science and technology in supporting health? Thank you.

Wu Yuanbin:

First of all, thank you very much for your question. Since the COVID-19 pandemic outbreak, the science and technology community in China has firmly implemented the decisions and arrangements made by the CPC Central Committee and the State Council and established an MOST-led research and development team under the State Council's inter-agency task force. We have focused on the five areas of viral etiology, testing technology and products, clinical treatment and medicine, vaccine development, and animal model construction, organized scientific elite forces nationwide, and spared no efforts in promoting research breakthroughs. A series of practical and effective achievements have been secured and applied to the fight against the pandemic. From sharing virus gene sequences in a timely manner, screening effective drugs and conducting large-scale nucleic acid testing, and promoting the development and marketing of vaccines, China has demonstrated its "core anti-pandemic force" in scientific research for pandemic prevention and control.

General Secretary Xi Jinping pointed out that during the process of COVID-19 pandemic prevention and control, our science and technology personnel have carried out scientific research in major fields including treatment, vaccine research and development, and prevention and control measures, which has provided strong support for and made great contributions to the coordination between anti-pandemic efforts and socio-economic development. These achievements are attributed to the personal planning of General Secretary Xi Jinping and the strong leadership of the CPC Central Committee and the State Council and have highlighted the strengths of China's socialist system. These outcomes have also benefitted from China's establishment of a science and technology innovation system and the overall improvement of innovation capacity. These of course would not have been secured without the efforts and struggles of our scientific researchers.

Just now you mentioned progress in the research and development of vaccines and medicine. In order to maximize the success rate of vaccine R&D, China has arranged parallel vaccine research in the five categories of inactivated vaccines, nucleic acid-based vaccines, recombinant protein vaccines, adenovirus vector vaccines, and live attenuated influenza vaccines. Currently, 17 vaccines are undergoing clinical trials and seven of them are currently undergoing phase-3 clinical trials. Four others have so far been authorized for conditional marketing, and have applied for the vaccination of key populations nationwide.

With regard to drug research and development, we started by focusing on strengthening effective drug sifting, with a total of 11 types of drugs — including traditional Chinese medicine (TCM) prescriptions — included in the treatment plan. This played a significant role in clinical rescue, preventing deterioration, reducing the death rate and other aspects. The development and application of new treatment technologies, including convalescent plasma and stem cells, have achieved clear results in the treatment of severe and critically ill patients. In terms of research and development of specific drugs, we focused on promoting the R&D of neutralizing antibodies, and currently, seven single drug types and one combination drug have been approved for clinical trials.

Just now you asked about our work going forward. First, we will continue advancing scientific research into epidemic prevention and control, strengthening understanding of the epidemic trends and risk warnings, accelerating R&D of vaccines and antibody drugs, upgrading detection technologies and product inventions, and tracing virus mutations and their impact on vaccines, drugs and testing reagents, thus providing a solid scientific and technological underpinning for the pandemic control. Second, we will better align the long-term development on life and health. We will strengthen innovative capacity-building on healthcare technology, establish a scientific research system and a rapid support mechanism in preparation for both peacetime and wartime. In addition, we will focus on epidemic prevention and control, the prevention and treatment of major and severe diseases, reproductive health and aging population problems and other key fields, and make an overall plan for scientific tasks. Third, we will accelerate the addressing of shortcomings in etiology study and R&D of high-end medical equipment to better ensure people’s lives and health through scientific innovation. Thank you.

National Business Daily:

How basic research can be strengthened to improve our original innovative ability remains an issue of great public concern. The Fifth Plenary Session of the Central Committee proposed formulating a 10-Year Action Plan for basic research, so my question is, what major progress has China made in this regard? And what specific measures will be taken next?

Wang Zhigang:

I'd like to hand your questions to Mr. Ye Yujiang.

Ye Yujiang:

Thank you for your questions. Basic research is the main resource in scientific technology, and a central gear for all technical issues. A country's foundation and stamina of technological innovation is determined by its level of basic research, which is also a prerequisite for China to achieve self-reliance in scientific technology. After years of efforts, and particularly since the 18th National Congress of the CPC in 2012, our basic research has achieved remarkable progress. On the whole, we believe that we have entered a new stage from quantitative accumulation to qualitative leap, from point breakthroughs to systematic capability improvement. To summarize briefly on the following four points: First, the development of the discipline demonstrates a good momentum and a number of major original results have been achieved. They include: China's high-quality international papers have reached second place globally for several consecutive years; the number of citations of SCI papers in 12 disciplines also now ranks second in the world, and our number of highly cited scientists has been second in the world for two consecutive years. We have also achieved major results with international influence in the fields of material sciences, quantum science, nanoscience, and life sciences. Second, we have significantly increased investment in basic research, which I explained earlier, so I won't repeat myself. Third, the policies and systems which support basic R&D have been continuously improved. We have formulated and issued documents to support our basic research work, such as Several Opinions of the State Council on Fully Strengthening Basic Scientific Research, Strengthening Basic Research Work Plan 'From zero to one', and Several Key Measures to Deepen Basic Research in the New Situation. Fourth, important progress has been made in the construction of scientific research bases. Currently, there are more than 500 national key laboratories, while 13 national applied mathematics centers have been built. With regard to the basic conditions of scientific research, we are building national scientific database centers, and resource management libraries for biological species and laboratory materials, as well as national research stations for observing wildlife, and we have increasingly consolidated our basic conditions for scientific research.

Next, we will further our basic research guided by the 14th Five-Year Plan from the following two aspects: First, we will double our efforts aiming at the cutting-edge of world science. As a major country, the Chinese nation should contribute to global scientific development and the progress of human civilization. Second, we will stress the concept that application is the key to basic research. Currently, we are faced by many bottleneck technical challenges, the root of which is that our basic theoretical research still lags behind. Therefore, in the first year of the 14th Five-Year Plan, we will pay more attention to solving scientific problems in our production practices and guide more scientists in conducting aim-oriented basic applied research, so as to make breakthroughs in national development and security.

The other important step to strengthening basic research is to focus on scientific issues when conducting basic research. Asking scientific questions is the fundamental prerequisite for solving problems scientifically as scientific research always starts with problems. If we fail to raise truly meaningful scientific questions, there will be no theoretical or methodological innovations, let alone major scientific achievements. Therefore, we will encourage scientists to begin with the truly scientific questions and pursue original topics by proposing new theories, exploring new fields and blazing new trails when consolidating basic research. We will formulate the Decade Action Plan for Basic Research (2021-2030) in accordance with the requirements of the central government. This plan will formulate a systematic deployment and arrangement for the development of basic research in China over the coming 10 years. Here, I will briefly introduce the preliminary considerations as well as how to strengthen basic research going forward.

First, we will further optimize the structure of both academic disciplines and R&D efforts. We will support the development of emerging disciplines, unpopular disciplines, and weaker disciplines, and especially promote the integration of disciplines as well as interdisciplinary research. A number of research centers for basic disciplines in cutting-edge fields will also be built.

Second, we will formulate and implement strategic scientific plans and projects, advance application-oriented basic research, and improve the supply system of basic generic technologies. 

Third, we will accelerate the development of national laboratories, reorganize the structure of national key laboratories, and establish systematic strategic sci-tech strength.

Fourth, we will reform and improve the systems and mechanisms for basic research and further increase input in basic research. In particular, we will establish an evaluation system that centers on academic contribution and innovation value in a bid to support research personnel to make innovation breakthroughs. Thank you.

Hong Kong Bauhinia Magazine:

The proposals for formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 adopted at the fifth plenary session of the 19th CPC Central Committee said for the first time that enterprises will be supported to take the lead in establishing innovation consortiums and undertake major national sci-tech projects. What measures will the Ministry of Science and Technology (MOST) take next to improve enterprises' innovation capacity? Thank you.

Wang Zhigang:

I will take your question. What you've asked is very important. Enterprises are both market entities and a principal force in sci-tech innovation. They need to innovate to grow, and their innovation has great significance to the development of industries and society. Therefore, it is necessary to give full play to the role of enterprises as a principal force in innovation, and this is also a key aspect of sci-tech innovation. In addition, from the perspective of building a new development paradigm, we need to prioritize sci-tech innovation and enterprises need to take their fair share of responsibilities in this regard. In recent years, MOST has been working with relevant government bodies to carry out the national technology innovation project, and guide and encourage the flow of innovation resources to enterprises. Meanwhile, we have strengthened policy support and guidance for enterprises, and given full play to the market's decisive role in allocating resources. We have been working proactively to create a favorable environment with fair opportunities, rights, and rules so as to stimulate and improve the innovation capacity of enterprises via fair competition. This applies to Chinese and foreign enterprises under all types of ownership.

First, we focused on the implementation of policies. In 2020, more than 350 billion yuan in tax was cut or exempted from enterprises' additional tax-deductible R&D costs, up approximately 25% year-on-year. Second, we stepped up efforts to develop innovative enterprises. The number of new and high-tech enterprises and sci-tech SMEs have reached about 275,000 and 223,000, respectively. A number of innovative enterprises with international competitiveness are growing at an accelerated pace. Third, we worked to improve services concerning innovation. We promoted the opening and sharing of sci-tech resources, and provided innovative enterprises with services such as technology transfer, investment and financing, and those concerning intellectual properties. In 2020, the number of China's new and high-tech enterprises grew by 24% year-on-year. Their revenue, output value, and profit totaled 51.3 trillion yuan, 37.8 trillion yuan, and 3.8 trillion yuan, up 13.8%, 16.6%, and 20.1%, respectively. New and high-tech enterprises have greatly contributed to China's efforts to ensure stability on six fronts and maintain security in six areas, playing an important role in supporting the high-quality development of China's economy. Last year, when the epidemic situation was rather severe, new and high-tech enterprises were among the first to resume production and deliver positive growth and their performance ranked among the highest compared with all types of business. In the meantime, it should be clear that the principal position of China's enterprises in innovation has yet to be prioritized, and their capacity for technological innovation needs to be further developed. In addition, the innovation mechanism that integrates the efforts of enterprises, universities, and research institutes needs to be further strengthened to achieve better results.

Looking forward, MOST will earnestly implement the guiding principles of the fifth plenary session of the 19th CPC Central Committee and launch a program to improve enterprises' technological innovation capacities. MOST will look to enterprises as the main player in promoting technological innovation collaboration among universities, scientific research institutes and enterprises, in a bid to promote enterprise-led sci-tech innovation. First, MOST will step up efforts to develop innovative enterprises, foster a number of leading innovative enterprises in key fields, and give full play to big enterprises' role in leading and supporting sci-tech MSMEs to become sources for innovation. Second, MOST will pool premium resources for enterprises to help them improve technological innovation capacity. We will move faster to build national sci-tech innovation centers. Centering on enterprises, MOST will establish platforms for scientific research and generic technologies in a bid to provide innovation resources such as technology, funds, and talents to enterprises. In particular, we will work to attract high-level talents for enterprises. Third, MOST will promote profound integration between enterprises, universities, and research institutes via national projects. MOST will also support enterprises to take the lead in establishing systematic and task-oriented innovation consortiums. Leading enterprises are encouraged to head up or participate in national sci-tech projects. MOST will also provide guidance for all types of enterprises to participate, summarize, and put forward R&D projects to make breakthroughs in core technologies in key areas, and further build China's strategic sci-tech strength. Fourth, MOST will strengthen targeted policy support. This means strengthening the implementation efforts of existing policies, making sure that enterprises are able to receive all possible benefits available. Some existing policies require improvement, while others must be better implemented. There is still much work to be done in this regard. Additionally, MOST will put forward a number of new policies to foster new impetus and stimulate vitality for enterprises' innovation efforts. This includes encouraging enterprises to carry out basic research and improve innovation capacity, supporting the R&D and innovation efforts of SMEs, providing incentive policies for sci-tech personnel, and policies regarding intellectual properties, etc. Thank you.

Beijing Radio & Television Station: 

The Fifth Plenary Session of the 19th CPC Central Committee proposed that China should uphold the central role of innovation in its modernization drive and make self-reliance and self-strengthening in science and technology the strategic underpinning for national development. How can we understand what self-reliance and self-strengthening in science and technology means, and what are the next steps you plan to take? How can we better understand the relationship between self-reliance and open cooperation in science and technology? Thank you. 

Wang Zhigang: 

Thank you for your questions. The Fifth Plenary Session of the 19th CPC Central Committee stressed that China should uphold the central role of innovation in its modernization drive and make self-reliance and self-strengthening in science and technology the strategic underpinning for national development. This is a major strategic decision made by the CPC Central Committee with Comrade Xi Jinping at its core, with both current and long-term needs in mind. It is not a choice of expediency, but a consistent decision that must be adhered to on a long-term basis. Scientific and technological innovation has always played an important and irreplaceable role in the prosperity and development of any country and the progress of human civilization, and its role will become more prominent in the future. With the coming of the new era, China has bigger and more urgent requirements for scientific and technological development. In the next stage of development, a high level of sci-tech self-reliance and self-strengthening is the key to promoting high-quality development and fostering a new development paradigm. The core of self-reliance and self-strengthening in science and technology is to continuously improve the innovation capabilities in this regard. We must also make innovation the logical starting point for advancing our economic and industrial development. We must seek answers and solutions through innovation. We will continuously meet people's needs for a better life with sci-tech advancement, and enhance our industrial, economic and national strengths on a strong foundation of science and technology. By so doing, we will be able to make contributions to the world's scientific and technological development, responding to the common challenged of mankind, and build a community with a shared future for mankind.

The focus on how to achieve a high level of self-reliance and self-improvement is to highlight six areas:

First, we will focus on making breakthroughs in core and key technologies, and making up for technological shortcomings in key areas. We will deploy the innovation chain to match the industrial chain, and lay out the industrial chain around the innovation chain, so the two can complement each other and achieve rapid progress. We will apply new sciences and new technologies to spur the development of new industries and new economies. Efforts will be made to establish first-mover advantages and technological strengths in the frontiers of new scientific and technological development. This will ensure the security, stability, independence and controllability of the industrial chain and supply chain with innovation in science and technology.

Second, we are strengthening basic research and original innovation. We will enhance the ability to raise basic science questions in our production practice, and stimulate curiosity-driven basic research and application, and objective-oriented basic research. Mr. Ye has just talked about this issue. He said that asking good questions is far harder than finding answers, and that should be the key to basic research and scientific research. Therefore, we should attach great importance to worthwhile questions and our research orientations. This capacity allows us to start from basic research, and go forward to technological innovation and the industrialization of research results. It is why we say basic research is the master switch and fountainhead of scientific research. In addition, basic research produces not only technological research results, but scientific methods and new paradigms of scientific research. So, we say basic research should be strengthened in an all-dimensional and multi-layered manner. It is extremely important for us to build China into a science and technology giant. In the meantime, as China is entering a new development stage, we need to build a greater capacity for independent development and high-level development, and we should even be leading the world in certain areas. This will not only provide strong support and a solid foundation for China's economic and social development, but ensure the country can make more scientific and technological contributions to the international community.

Third, we are enhancing strategic scientific and technological strength. Efforts will be made to accelerate the development of national laboratories; restructure the system of key national laboratories; and give full play to the main forces for science and technology innovation, including universities, scientific research institutes, and enterprises, so as to foster a number of regional pacesetters for innovation with international competitiveness.

Fourth, we will strive to improve the technological innovation capabilities of enterprises, support them to take the lead in forming innovation alliances, undertake major national science and technology projects, promote integration and innovation of large-, medium- and small-sized enterprises, and implement more preferential policies for enterprises to invest in basic research.

Fifth, we will focus on stimulating the innovative vitality of talents, train and introduce good talents in all aspects, cultivate more world-leading talents and teams, and train a reserve army of young talents who are internationally competitive.

Sixth, we will promote reform of the science and technology system and mechanism; accelerate the transformation of government functions; promote the overall allocation of projects, bases, talents and funds in key areas; reform the evaluation and incentive mechanism; and promote ethical standards and improve academic practice in the science and technology field. Enhancing ethical standards and academic integrity is essential to scientific research — without ethics and integrity, the foundation of scientific research will not be firm. Therefore, at this point, we need to give full trust and strong incentives, and at the same time, we should also have restrictive measures.

With regards to scientific and technological self-reliance and open cooperation, they are not contradictory, but in a dialectical unity. Open cooperation is indispensable in pursuing the path of independent innovation with Chinese characteristics. We need to be self-reliant so that we can develop open cooperation in science and technology with equality and mutual respect. Without such a foundation and precondition, open cooperation will not prosper in reality. Furthermore, open cooperation provides mutual benefits and win-win results. In opening-up to the outside world, China has always put science and technology at the forefront. We have continued to contribute to global scientific and technological progress and socio-economic development, while at the same time, we have benefited greatly from international scientific and technological cooperation. At present, China's scientific and technological innovation and development are increasingly inseparable from the world’s, while global scientific and technological progress also increasingly needs China. Looking to the future, China will implement an international science and technology cooperation strategy that is more open, inclusive and mutually beneficial. China's desire to promote open cooperation in science and technology will be stronger. The door will be opened wider and greater steps forward will be taken. We are willing to work with countries around the world to actively carry out dialogues, exchanges and in-depth cooperation on science, technology and innovation. For example, first, in fields related to sustainable development — such as climate change, energy, resources and public health — we should establish global scientific research funds, actively contribute Chinese wisdom and jointly respond to global challenges. Second, in the prevention and control of major infectious diseases and in the public health sector, we should create scientific and technological cooperation mechanisms and promote more practical cooperation. As I said in my opening remarks, when the epidemic was at its most serious in China, an important part of our work fighting the epidemic was to carry out scientific research and share our experiences with other countries. Third, we need to work with other countries to promote scientific research and technological innovation that concerns the well-being of mankind. We need to jointly condense scientific issues and support scientists from all countries to cooperate in scientific research activities. We should also jointly promote achievements in scientific and technological cooperation to serve the development of all countries and the well-being of the people, so as to fulfill the mission of scientific and technological innovation in building a community with a shared future for mankind.

As the host said, this was the last question. I would like to again express my gratitude to friends from the media. I hope you will continue to follow, study and support scientific and technological innovation and development, and provide a better environment and more positive energy. Thank you, everyone.

Chen Wenjun:

Thank you, Minister Wang. Thanks to our speakers, and thank you all for participating in today's press conference. Happy Lantern Festival! 

Goodbye!

Translated and edited by Wang Yiming, Chen Xia, Fan Junmei, Li Huiru, Zhang Jiaqi, Zhou Jing, Xu Xiaoxuan, Zhang Tingting, Liu Qiang, Yan Xiaoqing, Guo Yiming, Wang Qian, Zhang Rui, Wang Wei, Liu Jianing, Yuan Fang, Zhu Bochen, Zhang Junmian, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Wang Wentao, minister of commerce

Wang Shouwen, vice minister of commerce and deputy China international trade representative

Qian Keming, vice minister of commerce

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office

Date:

Feb. 24, 2021

Chen Wenjun:

Ladies and gentlemen, good afternoon. China has entered a stage of high-quality development and is building a new development paradigm. The development of commerce plays a very important role in the building of this paradigm. Today, we are honored to be joined by Mr. Wang Wentao, minister of commerce; Mr. Wang Shouwen, vice minister of commerce and deputy China international trade representative; and Mr. Qian Keming, vice minister of commerce. They will explain related issues and answer your questions.

Now, let's give the floor to Minister Wang Wentao.

Wang Wentao:

Thank you, Mr. Chen. Friends from the media, good afternoon. It's a great pleasure to meet with you. On behalf of the Ministry of Commerce (MOFCOM), I would like to express my sincere thanks to friends from the media who have shown interest and supported us in the development of commerce.

The year 2020 was marked by a severe and complex international situation, and especially the coronavirus outbreak. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, the MOFCOM coordinated COVID-19 responses with economic and social development, and took solid steps to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations) and security in the six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government).

We have stabilized the overall performance of foreign trade and foreign investment, promoted the recovery of consumption, made new breakthroughs in multilateral and bilateral economic and trade relationships, and steadily developed commerce, which performed better than expected. These efforts have contributed to social and economic development in China.

This year, the MOFCOM will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, accurately understand the new development stage, act on the new development philosophy, and accelerate the establishment of the new development paradigm. We will strive to achieve the high-quality development of commerce and make a good start on the new journey to celebrate the 100th anniversary of the founding of the CPC with great achievements.

My colleagues, Vice Minister Wang Shouwen and Vice Minister Qian Keming, as well as myself, will now answer your questions. 

Chen Wenjun:

Now the floor is open to questions. Please state the name of your news outlet before asking your question. Thank you.

Yicai:

Affected by a multiple factors including the coronavirus, there have been mixed views about China's foreign trade this year. What predictions do you have regarding China's imports and exports this year? What new policies and measures will the MOFCOM introduce to help foreign-trade companies stabilize industrial and supply chains? Thank you.

Wang Wentao:

Thank you. Your questions are about China's foreign trade outlook this year and what measures we are taking to maintain stability. First, let's quickly review its performance in 2020. Last year, General Secretary Xi Jinping made important instructions on stabilizing the overall performance of foreign trade and foreign investment, and the State Council adopted a series of policies and measures in this regard. All relevant departments and local governments made concerted efforts. Foreign-trade companies met the challenges head-on and worked hard. Generally, remarkable progress was achieved in China's foreign trade last year. The combined value of imports and exports for 2020 reached 32.2 trillion yuan, an increase of 1.9% year on year. These figures reveal three points: first, China was the only major economy that registered positive growth in foreign trade; second, China's foreign trade volume and international market share hit record highs; and third, the country maintained its position as the world's largest trading nation in goods.

The situation in relation to China's foreign trade will remain severe and complex this year. Demand hangs in the balance amid uncertainties caused by the COVID-19 pandemic. Factors affecting the stability of industrial and supply chains are also still appearing. We will take firm measures to maintain stability in the overall performance of foreign trade and foreign investment. Efforts will be focused on plans to optimize imports and exports, integrate foreign trade industries, and promote unimpeded trade. More specifically, we will pay attention to the following aspects:

First, we will continue to strengthen policy support. We will collaborate with local governments and relevant departments to maintain the continuity, stability and sustainability of our policies. We will solicit opinions from foreign-trade companies on a regular basis and help solve their problems. For example, we are working to facilitate international logistics, lower logistics costs, improve export credit insurance, ensure the reasonable release of foreign trade loans, and support companies in stabilizing and expanding employment. We are also making timely adjustments as conditions change, all while maintaining the continuity and stability of policies.

Second, we will ensure the stability and unimpeded flow of industrial and supply chains in foreign trade. More efforts will be made to push forward industry convergence in trade sector. We will identify a batch of new foreign trade bases for transformation and upgrading, and foster a group of processing trade industrial parks. We will also establish a batch of national import trade innovation-oriented demonstration zones to expand the scale of imports and boost the quality and efficiency of related industries. 

Third, we will help foreign trade enterprises to secure orders and expand the market, focusing on giving further play to the role of various platforms. We have several good platforms, and we will continue to make good use of them this year. We will hold the Fourth China International Import Expo (CIIE) and China International Fair for Trade in Services (CIFTIS) 2021. We will also make full use of important exhibition platforms such as the Canton Fair and the first China International Consumer Goods Fair (CICGF) to stabilize orders and expand the market for enterprises. Meanwhile, depending on the pandemic situation, exhibitions and fairs will adopt both online and in-person. We will advance development of the international marketing system, especially upgrading overseas warehouses, to promote the integration of domestic and foreign trade. We will also negotiate with more trading partners, especially Belt and Road countries, to set up a working mechanism for the unimpeded flow of trade, and create a favorable international environment for foreign trade enterprises.

Fourth, we will take the initiative to foster new forms and models of foreign trade. Since the outbreak of COVID-19, new forms and models of foreign trade have played an important role, such as cross-border e-commerce and market purchase trade. In 2020, the trade volume of China's cross-border e-commerce reached 1.69 trillion yuan, up 31.1% year on year, while the export through market purchases reached 704.54 billion yuan, up 25.2% year on year. Both of these double-digit growth rates indicate that the new forms and models have strong vitality. Next, we will give them more support, and contribute to stabilizing foreign trade this year. Thank you for your questions.

CCTV:

The fifth plenary session of the 19th CPC Central Committee proposed that the modern circulation system be improved during the 14th Five-Year Plan period to reduce enterprises' circulation costs. This was reiterated at the recent meeting of the Central Committee for deepening overall reform. What are MOFCOM's considerations regarding specific implementation measures? How can we develop a modern trade circulation system? Thank you. 

Wang Wentao:

As we all know, circulation connects production and consumption. Since the 18th CPC National Congress, commercial and trade circulation have developed rapidly in China, and an open and competitive pattern with diverse actors and models has basically taken shape. However, there are also some shortcomings in circulation. For example, China's national logistics costs as a percentage of GDP in 2020, often viewed and compared internationally, stood at around 14.7%, roughly 6 percentage points higher than that of developed countries. The cost of logistics in China is relatively high. Another indicator is cold chain logistics, which is China's weakest point. The loss rate of agricultural products during transport in developed countries is less than 10%, while in China it is about 12%, with fruit and vegetables even higher, registering around 18% — although some studies suggest it is over 20%. This indicates that we still have many shortcomings in terms of logistics and China's circulation companies are less competitive internationally. 

General Secretary Xi Jinping has stressed that an efficient modern circulation system is essential for both domestic and international circulations. MOFCOM's considerations mainly focus on making improvements in six areas with a problem-oriented approach to develop a modern circulation system.

First, we will improve the circulation network layout. If the circulation network is compared to the human cardiovascular system, the backbone network is just like the main arteries. So, we must first develop a sound backbone network before ensuring the smooth flow of basic network, and open up the "capillaries" to have a sound network system. As such, we need to focus our efforts on the backbone network by making a proper plan for commodity distribution centers, comprehensive logistics parks and public distribution centers among others. With a sound backbone network, we will then be able to ensure the last-mile "capillaries" of the network.

Second, we will improve the circulation infrastructure, which is still left behind when compared with developed countries. At present, the main shortcoming is the "last mile." Just now I talked about the establishment of a "backbone" network. Next, we need to open up the "capillaries," especially with regards to the last mile. The important thing is that the work should reach down to all levels. How can this be done in urban areas? We should ensure residents have access to convenience stores, vegetable markets and community centers, that is, we should focus on making them available within 15-minutes of people's homes. How can it be done in the countryside? In rural areas, we should focus on improving the commercial system, transforming the three-level commercial and trade circulation network of counties, townships and villages, improving the logistics distribution network, and unblocking the flow of industrial products to the countryside and agricultural products to cities. We have set a goal that by 2025, every county should have chain stores and logistics distribution centers, every town should have business centers, and every village should have express delivery. We should focus on reaching all levels in urban and rural areas to solve the last mile problem.

Third, we will enhance the competitiveness of the main circulation. As I said, compared with developed countries and large international circulation enterprises, our circulation enterprises still have many shortcomings. Now, however, new technology applications such as 5G, the Internet of Things, big data, cloud computing and artificial intelligence, have given circulation enterprises a good opportunity to catch up quickly. We are encouraging and guiding circulation enterprises to seize this opportunity and make great strides in digital, network and smart technologies to improve circulation.

Fourth, we will improve the circulation development model. There are shopping malls, supermarkets and retail outlets all over urban and rural areas. We should encourage and guide innovation and transformation. Innovation and transformation are based on digitization, intelligent transformation and cross-border integration. In some grassroots areas, retail outlets are not only outlets for consumption, but also logistics end-points. They have already started cross-border integration, selling things, receiving goods and sending express mail. At the same time, we should also develop green circulation.

Fifth, we should improve the level of supply chain modernization. We will focus on the creation of supply chain innovation and application demonstration, and promote the deep integration of circulation innovation and industrial change.

Sixth, we should enhance the integration of domestic and foreign trade. We will break through the blockage points in domestic and foreign trade circulation, and build a smooth channel for domestic and international markets. The key is to promote the connection of domestic and foreign trade in laws and regulations, regulatory systems, quality standards, certification and other aspects. At present, they are not connected closely enough, and the flow of domestic and foreign trade is not smooth enough. Investigations show that only about 10% of domestic and foreign trade can be connected in some places. Going forward, we need to expand the convergence of laws and regulations, regulatory systems, quality standards, certification and accreditation. We have long been promoting this work. This year, we will increase efforts to enhance the degree of integration of domestic and foreign trade.

Together, these six aspects form the answer to your question. Thank you.

CRNTT:

How does the MOFCOM see the next phase of China-U.S. economic and trade relations? The international community is paying much attention to the communication between China and the United States, and especially wonders if the two countries can re-establish the bilateral economic and trade dialogue mechanism. What's your position on this? Thank you.

Wang Wentao:

This is a question that attracts wide attention. On Feb.11, President Xi and U.S. President Biden held a phone call, exchanged ideas on China-U.S. relations and pointed out the direction of the future development of the bilateral economic and trade relationship. China upholds that the nature of China-U.S. economic and trade relation is mutual benefit and win-win results. The interests of the two sides are deeply integrated. The two countries stand to gain from cooperation and lose from confrontation. Cooperation is the only correct choice. Despite the global trade slump due to the COVID-19 pandemic in 2020, China-U.S. trade has bucked the trend. China is the largest trading partner of the United States. Cooperation of trade and investment of the two sides has contributed to their economic recovery. This has proven that economic and trade cooperation drives the development of China-U.S. relationship, and has brought real benefits to both sides. 

In his call with President Biden, President Xi stressed that China and the U.S. should re-establish the various dialogue mechanisms, read each other's policy intentions accurately, and avoid misunderstanding and miscalculation. China is willing to deepen bilateral exchanges in economic and trade, and cooperate on the basis of mutual respect, equality and mutual benefit. This serves the interests of the people in both countries and benefits the whole world. In the next stage, I look forward to joint efforts with our colleagues in the United States. By following the spirit of the phone call between the presidents of the two countries, we would like to step up communication, enhance understanding, focus on cooperation and manage differences in order to take bilateral economic and trade relations back on the track of cooperation. Thank you. 

Market News International:

China has expressed that it's readily considering joining the CPTPP after the signing of the RCEP. What's the role of your ministry in this regard? Is there any relevant timetable? What are the challenges to China's economic development if China joins the CPTPP, such as labor and environmental standards and intellectual property protection? Thank you.

Wang Shouwen: 

Thank you for your question. On Nov. 20 of 2020 at the APEC Economic Leaders' Meeting, President Xi said that China would favorably consider joining the CPTPP. In December last year, the Central Economic Work Conference proposed again that China would actively consider CPTPP membership. As you know, the CPTPP covers a wide range of content, and we are doing our work in two aspects. The first is that we are conducting assessments, research and deep analyses of all CPTPP clauses including those you mentioned. Second, we have made informal contacts with some of the 11 members of the CPTPP. We also plan to engage with the rest of the members as well to talk at the technical level on issues involved, so we can have a more accurate understanding regarding the content of relevant agreements. Thank you. 

Phoenix TV:

I have a question about the WTO reform. We know that this year marks the 20th anniversary of China joining the WTO, but currently the WTO is facing a lot of difficulties and challenges. What will China do to advance WTO reform? Thank you. 

Wang Shouwen: 

Thank you for the question from Phoenix TV. This year marks the 20th anniversary of China joining the WTO. In the past two decades, China has fully complied with its obligations as a WTO member. We have opened our market, fulfilled our commitments, and actively participated in and contributed to some WTO negotiations, including negotiations on Trade Facilitation Agreement, on the expansion of the Information Technology Agreement, and about agricultural subsidies. China has actively reported to the WTO regarding its reforms and policy changes. Our trade policies have been reviewed by the WTO seven times and we are going to undergo the eighth. We have specially established a China Program, helping the Least Developed Countries (LDCs) integrate into the WTO mechanisms along with the efforts of the WTO Secretariat. 

After the paralysis of the Appellate Body of the WTO dispute settlement mechanism, China, together with other members such as the E.U., worked to establish the Multiparty Interim Appeal-Arbitration Arrangement. In this way, China as a member of WTO has made its own contribution to strengthening the authority and effectiveness of the WTO. As you have just mentioned, the WTO has encountered some difficulties, such as the challenges posed by unilateralism and trade protectionism, the paralysis of the Appellate Body and tough WTO negotiations. It needs to change in such a situation and China supports necessary reforms. In this regard, Dr. Ngozi Okonjo-Iweala, was officially appointed as the new director-general of the global trade body on Feb. 15. China will actively support Okonjo-Iweala, and hopes the WTO, under her leadership, will resume its normal functions as soon as possible. For example, we hope the 12th WTO Ministerial Conference could be successfully held this year and an agreement on fisheries subsidies could be reached. 

With regard to WTO reform, China has released its position paper and submitted a proposal to the WTO Secretariat. In our view, the first thing on the agenda is to restore the normal operation of the Appellate Body. If it is functioning normally, we can effectively fight against unilateralism and trade protectionism. In addition, we believe the WTO needs to properly reform some excessive agricultural subsidies, especially in regard to some developed countries, where subsidies in agriculture can be huge. The issue of public food security and reserves is also an issue about which the developing countries are concerned, which we believe should be a priority for WTO reform. 

In addition, as we all know the WTO already has a history of 25 years. During this time , the world economy, international trade and cross-border investment have undergone huge changes. For example, we are trading much more in services than 25 years ago, and cross-border investment has also greatly expanded. E-commerce was still in its infancy at that time, but today it is thriving. We also hope that the WTO can keep pace with the times and consensus can be reached on domestic regulation in trade in services, investment facilitation and e-commerce.

Not long ago, the Davos Agenda was held by the World Economic Forum and President Xi Jinping delivered a special address in which he said that we should build an open world economy, uphold the multilateral trading regime; we should advance WTO reform and protect the interests and opportunities of developing countries. China is now at a new stage of development and accelerating the building of a new development paradigm. In this process, we will further open up to the outside world and are also willing to work with other WTO members to continue to support the strengthening of the WTO's authority and effectiveness, while at the same time, as the world's largest developing country, we are also willing to make more contributions and fulfil our obligations commensurate with our capabilities, based on the principle of balancing rights and duties. Thank you.

CNBC:

I would like to ask what special policies will be issued for the e-commerce sector in order to speed up the high-quality development of commerce? Thank you.

Qian Keming:

Thank you for your question. E-commerce has been developing very fast over the past few years. Along with a new round of technological revolution and industrial change, China has been at the forefront of e-commerce development in the world, and it has profoundly reshaped people's production and way of life, especially since the outbreak of the COVID-19 pandemic, under which we have all felt the changes. Online shopping has become an important consumption channel for people. Last year, online retail sales of physical goods accounted for nearly a quarter of total social consumption. Since the outbreak of the pandemic, e-commerce has played a prominent role in helping fight it, securing supplies, resuming work and production and promoting replenishment of consumption. It has become a stabilizer of social and economic development. Not long ago, the MOFCOM, in conjunction with relevant departments, guided the launch of the "2021 Online Lunar New Year's Shopping Festival", which generated online retail sales of over 900 billion yuan nationwide and ensured market supply for people not travelling during the Spring Festival.

The MOFCOM, as the competent department of the e-commerce industry, always insists on developing and regulating the sector at the same time, and constantly optimizes the environment for the development of e-commerce. This year, we will focus on the following aspects.

First, we will improve top-level design. At present, we are pressing ahead with the devising of the 14th Five-Year Plan involving e-commerce development. Based on the new development stage, implementing the new development concept, and serving the building of the new development paradigm, we will put forward a series of targets, major tasks and supporting measures for the high-quality development of e-commerce in the 14th Five-Year Plan period, so as to provide new momentum for the building of a modern socialist country in all aspects.

Second, to promote innovation-driven development. We will actively develop and accelerate new types of consumption via platforms such as livestreaming e-commerce and fresh food e-commerce. We will build platforms, such as "Brand and Quality Online Shopping Festivals," to upgrade consumption and enrich content for online consumption. We will promote the integration of online and offline consumption and support the digital transformation of brick-and-mortar businesses and guide e-commerce platforms to energize small and medium-sized companies. We will also deepen the development of e-commerce in rural areas. Mr. Wang just mentioned the building of business systems in rural areas. E-commerce is a major part of that. We will ensure that poverty alleviation and rural vitalization are well integrated and coordinate government and social resources. We will carry out campaigns to boost agriculture through e-commerce and develop new infrastructures to support the rollout of e-commerce in more rural areas and help farmers increase their income. We will also ramp up efforts to advance cross-border e-commerce and expand cross-border e-commerce retail import pilot programs, inviting more and more friends and partners to join Belt and Road cooperation. We will deepen exchange and collaboration with our Belt and Road partners concerning e-commerce and share the new opportunities of the digital age. 

At the same time, we must also be aware that with the fast development of China's e-commerce platforms, unfair competition and suspected monopolistic practices, among other related problems, have already aroused wide public concern. The MOFCOM will strengthen the management of e-commerce development. On the one hand, we will guide the creation of a social creditability system, put in place a credit filing system for e-commerce companies, and promote self-discipline within the industry. On the other hand, we will enforce mandatory and binding rules We will improve the laws and regulations regarding e-commerce, and conduct supervision of each company's compliance to prevent the uncontrolled expansion of business. We will work in collaboration with relevant departments to maintain an environment characterized by fair market competition. Thanks. 

Jiemian:

I'd like to ask a question about how to ensure stable foreign investment. In 2020, utilized foreign investment in China went against the global trend and became the world's top destination for foreign direct investment (FDI). Data shows that China saw faster growth and utilization of FDI in January compared to 2020. Will this trend continue and how does the MOFCOM view this year's foreign investment? In addition, with the global vaccination campaign rolling out and many countries having unveiled their coronavirus relief packages, we can assume that there will be increased competition regarding the utilization of investment. What kind of measures will the MOFCOM take to ensure stable foreign investment? Thanks.  

Wang Wentao:

I will answer this question. Just like you said, last year, China's actually utilized non-financial foreign investment increased by 4.5%, becoming the world's top destination for FDI. This January, the growth is also impressive. But we believe ensuring stable foreign investment this year remains complicated and severe because of ongoing uncertainties. As you mentioned, these uncertainties are arising from the epidemic and economic recovery. On the other hand, competition for investment across the world is increasing. However, we also see some opportunities. For example, the United Nations Conference on Trade and Development (UNCTAD) has projected that we'll see a further 5-10% decrease in FDI in 2021 based on a global decrease of 42% last year. The situation is severe but also provides opportunities. We will act per the policy decisions and plans of the CPC Central Committee and the State Council, and step up efforts to stabilize the total volume of FDI, optimize its structure, and improve the quality regarding FDI utilization. The concrete measures are as follows: 

First, we will continue to open up, which is fundamental. General Secretary Xi Jinping pointed out that China will open its door still wider to the world. As for the MOFCOM, we will continue to lower the entry threshold for FDI as well as implement the 2020 national negative list for foreign investment and the negative lists for foreign investment in pilot free trade zones and ports. We will also employ the new version of the Catalogue of Encouraged Foreign Investment Industries to create more opportunities for investment. The new version has 127 more items. Together we will share the benefits brought by China's reform and development. 

Second, we will make the best use of platforms for opening up. The MOFCOM will step up efforts to build pilot free trade zones and ports and national economic development zones. These are the major platforms and means for attracting foreign investment. We will build high-quality pilot free trade zones and ports and improve the planning of free trade zones, implement the overall plan for building the Hainan Free Trade Port, and carry out policies that support the liberalization and facilitation of trade and investment. China now has 217 national economic development zones. We need to further expand opening-up, push forward the transformation and upgrading of economic development zones, and build new highlands for reform and opening up in a bid to better serve the new paradigm of development. We will also launch further comprehensive trials for opening up the service sector to guide these pilot areas to take bold steps in exploring new ground and methods that are best suited to local conditions.

Third, we will create a better business environment. We all know that with unremitting efforts, China has made a big jump in the World Bank's business environment ranking, reaching No. 31 in 2019. Under the leadership of the CPC Central Committee and the State Council, we will further improve the business environment, better implement the Foreign Investment Law and its relevant regulations, enact, revise, and repeal supporting regulations as necessary, and advance reforms to streamline administration and delegate power, improve regulation, and upgrade services. We will well implement the rules on handling complaints from foreign-invested enterprises, intensify the protection of legitimate rights and interests of foreign businessmen, and continuously promote the marketization, legalization and internationalization of business environment. By doing so, foreign investors will get a better environment, better development and better rewards when doing business in China. Thank you.

International Business Daily:

China and the EU have substantively concluded the negotiations on the Comprehensive Agreement on Investment (CAI), so when will the agreement be signed? How do you see the future development of China-EU economic and trade relations? Thank you.

Wang Wentao:

China-EU relations enjoy a solid foundation, close high-level exchanges, and fruitful economic and trade outcomes. Last year, Chinese President Xi Jinping had 23 online meetings and phone calls with leaders of the EU and European countries. In February, President Xi chaired the Summit of China and Central and Eastern European Countries (CEECs) via video link. Last year, Chinese Premier Li Keqiang co-hosted the 22nd China-EU leaders' meeting via video link. High-level interactions between China and the EU have increased mutual trust, laid a sound foundation, and indicated the direction for further development of China-EU economic and trade relations. 

China-EU economic and trade relations are very close, and showed great resilience and potential amid the COVID-19 pandemic in 2020. Bilateral trade volume rose by 4.9% to $649.5 billion, making China the EU's largest trading partner for the first time. The investment confidence of both sides remains undiminished. The EU's direct investment in China reached $5.7 billion, while China's direct investment in the EU reached $4.7 billion. Last year, China and the EU also signed a geographical indications agreement, which will take effect this year on March 1.

As you mentioned, the negotiations on the Comprehensive Agreement on Investment concluded last year as scheduled. This is a landmark in China-EU economic and trade relations. The investment agreement is a high-level, balanced, mutually beneficial and win-win agreement, and provides many investment opportunities for enterprises of both sides. Creating a better business environment will be beneficial not only to China and the EU, but also to the recovery and growth of the world economy. At present, we are carrying out relevant work including text reviewing and translating, and striving to sign it as soon as possible based on established procedures.

I would like to emphasize again that China and the EU are partners rather than opponents; cooperation between the two sides is far greater than competition. We should expand common interests through cooperation, and solve problems during development. China is willing to strengthen cooperation with the EU in fighting COVID-19, promote pragmatic cooperation in the fields including economy and trade, , green development and digital economy, and maintain the stability of the global industrial chain and supply chain, so as to contribute to the recovery and growth of the global economy in the post-pandemic era. Thank you.

Bloomberg News:

My question is about Australian trade. What has to happen for China to end the ban or the block on the importation of Australian coal, and for the removal of other impediments to exports from Australia to China? Thank you.

Wang Shouwen:

Thank you for your question. The economic and trade relationship between China and Australia, I should say, has a very good foundation. There is a free trade agreement between our two countries and in the past 12 years, China has been Australia's largest trading partner and Australia's largest export market and source of imports. In bilateral economic and trade relations, Australia has a surplus in goods trade and service trade. Meanwhile, China's investment in Australia is more than Australia's investment in China so it can be said that China-Australia commercial relationship has brought huge benefits to Australia.

Take last year as an example. Everyone knows that the world economy is in recession due to the pandemic and while Australia's global trade declined, its trade with China increased. Australia's global export dropped as much as 8% but its export to China was down by less than 3%. You can see that the China-Australia bilateral economic and trade relationship has brought benefits to Australia, and of course, it also brought benefits to China. We believe that this is a mutually beneficial and win-win relationship. This economic and trade relationship is worth attention and care from both sides.

However, it is very regrettable that some individuals in Australia have stigmatized bilateral economic and trade relations, investment projects, and some normal economic and trade cooperation, adopting some restrictive and even discriminatory measures which have damaged bilateral economic and trade cooperation. We always believe that a healthy and stable China-Australia relationship is very beneficial to economic and trade cooperation, and is of common interest for both sides. We hope that Australia can take more actions that are conducive to increasing trust and cooperation and that are more in line with the spirit of the comprehensive strategic partnership between the two countries. This in turn will promote the healthy and stable development of bilateral economic and trade relations. Thank you.

China News Service:

We have noticed recent reports that the progress of some "Belt and Road" construction projects have been affected due to the pandemic, and some Chinese companies may face a relatively high risk of default. Under the complex and volatile international situation, what measures will the Ministry of Commerce take to guide Chinese enterprises to better "go global" and serve the Belt and Road construction? Thank you.

Qian Keming:

Thank you for your question. Since President Xi Jinping put forward the major initiative of jointly building the Belt and Road, China and relevant countries have adhered to the principle of extensive consultation, joint contribution, and shared benefits, and have continuously deepened practical cooperation in various fields, achieving fruitful results. The "Road and Belt" initiative has attracted worldwide attention and made very important contributions to promoting the construction of an open world economy and building a community with a shared future for mankind.

Last year, in the face of unfavorable factors such as the COVID-19 pandemic, China and relevant countries helped each other to overcome difficulties side by side, and promoted the Belt and Road cooperation to achieve new progress and results. The annual trade volume of goods with countries along the Belt and Road route totaled $1.35 trillion, a year-on-year increase of 0.7%. Meanwhile, non-financial direct investment in countries along the route was $17.79 billion, an increase of 18.3% year-on-year. Major projects, including the China-Laos railway, the Jakarta-Bandung high-speed railway, the China-Belarus industrial park, and many others have made positive progress.

The fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) made new arrangements for Belt and Road cooperation, which guided our next steps. The Ministry of Commerce will resolutely implement the decisions and deployments of the CPC Central Committee and the State Council, centering around building a new development paradigm, focusing on economic and trade cooperation of the Belt and Road, and promoting high-quality Belt and Road cooperation. This year, we will focus our work in four aspects:

First, we will improve the quality of trade. We will work hard to expand two-way trade with Belt and Road partner countries, and in particular, increase the import of quality products from these countries so that more countries can share the dividends of our super-sized domestic market. Meanwhile, we need to develop "Silk Road e-commerce", and promote the integrated development of new forms and models of business such as cross-border e-commerce and the BRI to create new impetuses for the construction of major trade passageways such as the China-Europe freight train services and the New International Land-Sea Trade Corridor. Simultaneously, we will also promote the establishment of high-standard free trade zones to create a free and convenient international environment for the BRI cooperation.

Second, we will make innovations in investment cooperation. We will take measures to innovate overseas investment cooperation, promote upgrading overseas contracted projects, and expand third-party market cooperation. By doing this, we aim to promote the development of high-quality cooperation projects and carry out foreign assistance programs that will benefit the people and encourage capable domestic enterprises to go global. Meanwhile, we need to attract more enterprises from BRI partner countries to invest in China and promote the building of industrial chains, supply chains, and value chains that benefit both sides.

Third, we will establish platforms. We will spare no effort in holding a series of important events including the fourth China International Import Expo and China International Fair for Trade in Services 2021. We will also play a supportive role for platforms such as the China Import and Export Fair, China-ASEAN Expo, China-Africa Economic and Trade Expo, China-Arab States Expo, China-Russia Expo, and China-CEEC Expo, etc., and build more platforms to deepen BRI economic and trade cooperation. 

Fourth, we will strengthen the building of institutions. We will actively boost collaboration in strategies, plans, and mechanisms with BRI partner countries. Within the framework of bilateral economic and trade joint commissions and mixed commissions, we will set up additional working groups for the promotion of unimpeded trade and working groups for investment cooperation, and improve working mechanisms in fields such as trade in services and e-commerce to provide institutional guarantees for the BRI cooperation. Thank you.

Chen Wenjun:

This is the final question.

Hong Kong's Bauhinia Magazine:

So far, 21 pilot free trade zones (FTZs) have been established in China. What roles can these pilot FTZs play in fostering a new development paradigm? What are the specific considerations? What are the new measures for the construction of the Hainan Free Trade Port? Thank you.

Wang Wentao: 

Thank you for your question. I'll answer this one. General Secretary Xi Jinping has pointed out that we need to link up the construction of a new development pattern with the implementation of the strategy for coordinated regional development and the construction of pilot free trade zones to create a new highland of reforms and opening-up. As you mentioned, China has set up 21 pilot FTZs, which has formed a nationwide pattern of reform, opening-up and innovation. A total of 260 achievements of institutional innovations have been replicated and applied across the country, effectively giving full play to their role as a pilot ground for deepening all-round reform and expanding opening up on all fronts. The most important role played by pilot FTZs is the pilot ground for deepening reform and opening-up. It is fair to say that they will play an increasingly larger role in, and make great contributions to, shaping a new development pattern.

Regarding specific considerations for the next step, we will mainly work on four aspects, namely, connecting markets, coordinating rules, integrating industries, and mutually promoting innovation. I'd like to provide more details regarding these.

We will boost connectivity between markets with profound reform measures. We will continue to grant greater autonomy in reform to pilot free trade zones, put forward more preliminary measures of profound reform, and break down barriers and solve difficulties existing in connecting domestic and global markets. We will further optimize our business environment, which is based on market principles, governed by law, and meets international standards, to energize market entities. In the meantime, we will work to foster more innovative measures and promote them across the country as long as they are proven to be effective.

We will promote the connectivity of rules with high-quality opening-up measures. Whilst promoting opening-up based on the flow of production factors, we also need to foster opening up based on related institutions. Thus, we can promote the connectivity of rules via free trade zones. This means that we will work to elevate our pilot free trade zone to high-level international economic and trade standards. By doing so, we will draw up and publish negative lists for cross-border service trade for our pilot free trade zones and further promote institutional opening-up such as those concerning rules, regulations, management, and standards. Just as I've mentioned, opening up must be based not only on the flow of production factors but also on institutions. By further improving the rules, regulations, and management standards of free trade zones, we will foster institutional opening up, and achieve a higher level of opening-up.

We will promote the integrated development of industries by opening up the industrial chain. There are 21 pilot free trade zones across China, each with its resource advantages and industrial features. We encourage pilot free trade zones to develop their unique features of reform and opening-up based on their strategic position and resource advantages. That includes developing businesses that leverage local strengths with a focus on high-quality market entities so that they can act as leaders in domestic industrial transformation, improve the quality of the industrial and supply chain, and achieve high-quality development.

We will foster innovation by pooling high-end factors of production. We will support pilot free trade zones by pooling more resources from China and abroad, especially talent, capital, technology, and data. We will strengthen international communication and cooperation, focus on basic research, and step up original innovation. By doing so, we will work to make pilot free trade zones the cradle of sci-tech innovation, and foster driving forces for high-quality and innovative development.

I would also like to elaborate on the Hainan free trade port as it has drawn wide attention. The building of the Hainan free trade port has acted as a model and a flagship of China's reform and opening-up efforts. It also represents a significant and novel approach in this field. Since the release of the master plan for the Hainan free trade port last year, we have seen some promising results. According to statistics from Hainan province, its regional GDP in 2020 grew by 3.5% and the import and export of goods increased by 3%, both higher than the national average. Policies also started to pay off since the master plan was released. A total of 310,000 new market entities were established in 2020, up 30.9%. Meanwhile, 1,005 new foreign companies opened businesses in Hainan, up 197.3% year-on-year. The province attracted some 122,000 talents overall, up 177% year-on-year. Since implementing the offshore duty-free policy, the average daily sales of offshore duty-free shops in Hainan exceeded 120 million yuan by the end of 2020, up more than 200% year-on-year. The future of the Hainan free trade port is very promising.

Next, we will fully grasp and put into practice General Secretary Xi Jinping's important instructions on building the Hainan free trade port, stay focused on China's overall development and major strategies, and spare no effort to effectively implement all tasks and polices stipulated in the master plan in a bid to continuously promote trade and investment liberalization and facilitation and secure greater progress in building the Hainan free trade port. Thank you.

Chen Wenjun:

Thank you to all the speakers and friends from the media. Today's press conference is hereby concluded. Thank you.

Translated and edited by Yang Xi, Xu Xiaoxuan, Wang Qian, Zhang Liying, Zhang Rui, Huang Shan, Lin Liyao, Zhang Junmian, Cui Can, Liu Qiang, Wang Yiming, Fan Junmei, Liu Jianing, Guo Yiming, Xiang Bin, Duan Yaying, Li Huiru, David Ball, Jay Birbeck, Geoffrey Murray, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs, and minister of agriculture and rural affairs

Zhang Taolin, vice minister of agriculture and rural affairs 

Wu Hongyao, a member of the CPC Leading Group of the Ministry of Agriculture and Rural Affairs (MARA) and director of the Secretariat of the Office of the Central Rural Work Leading Group

Chairperson: 

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO 

Date: 

Feb. 22, 2021

Chen Wenjun:

Ladies and gentlemen, good morning! The Opinion of the CPC Central Committee and the State Council on Advancing Rural Vitalization Across the Board and Accelerating Agricultural and Rural Modernization, or the "No. 1 Central Document," was released recently. To help people more accurately understand this important document, today we have invited Mr. Tang Renjian, director of the Office of the Central Leading Group for Rural Affairs and minister of agriculture and rural affairs, to brief you and answer your questions. We also have with us Zhang Taolin, vice minister of agriculture and rural affairs, and Wu Hongyao, a member of the CPC Leading Group of the Ministry of Agriculture and Rural Affairs (MARA) and director of the Secretariat of the Office of the Central Rural Work Leading Group.

Next, I will give the floor to Mr. Tang.

Tang Renjian:

Ladies and gentlemen, good morning! As the Spring Festival has recently concluded and farm work resumes, Xinhua News Agency yesterday released the Opinion of the CPC Central Committee and the State Council on Advancing Rural Vitalization Across the Board and Accelerating Agricultural and Rural Modernization, or the "No. 1 Central Document" in 2021. This has been the 18th No. 1 Central Document released by the CPC Central Committee in succession since the beginning of the new century, sending Spring Festival "policy" gifts for the Year of the Ox to the vast rural population. It is my pleasure to briefly introduce the document to you all. 

I. Background

Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China overcame tough challenges caused by COVID-19 and maintained the momentum of steady and sound agricultural and rural development in 2020. This has contributed to the accomplishment of all the goals set in the 13th Five-Year Plan (2016-2020). In particular, substantial progress was made in the following aspects. First, agricultural production capacity increased to a new level. Last year was the sixth consecutive year that national grain output exceeded 650 million metric tons; the science and technology contribution to agricultural growth surpassed 60%; improved varieties were used in the production of nearly all major crops; 71% of plowing, sowing and harvesting were mechanized; and the amount of agrochemicals applied declined for four years in a row. Second, a decisive victory was won in the battle against poverty. All people classed as impoverished by current standards were lifted out of poverty, and the 832 poor counties were removed from the national list. As a result, China has successfully eradicated absolute poverty and region-wide poverty, creating a miracle in the history of poverty reduction. Third, the income of rural residents registered continuous and rapid growth. The income of rural residents has grown faster than urban residents for 11 successive years. The urban-rural income gap narrowed from 2.64:1 in 2019 to 2.56:1 in 2020. The per capita income of rural residents doubled that of 2010 one year ahead of schedule. Fourth, rural areas took on a fresh look. Rural living conditions improved significantly, while weak areas such as infrastructure and public services were strengthened at a faster pace. With rural reforms gaining momentum, more vigorous drivers have been forged for rural development. New and historic achievements in agriculture and rural areas have laid a solid foundation for completing the task of building a moderately prosperous society in all respects as scheduled.

Riding on the momentum of earlier success, we have entered the 14th Five-Year Plan period (2021-2025), which marks the first five years on a new journey toward the second centenary goal of fully building a modern socialist China. The 5th Plenary Session of the 19th CPC Central Committee also made strategic arrangements for prioritizing agricultural and rural development and advancing rural vitalization. While addressing the Central Rural Work Conference at the end of last year, General Secretary Xi Jinping sent a clear signal to all CPC members and the whole of society: Along the new journey, work related to agriculture, rural areas and farmers ("sannong" work) remains a crucial matter that cannot be neglected and requires hard work. Taking into account both domestic and international dynamics, General Secretary Xi pointed out that national rejuvenation calls for rural vitalization, and keeping "sannong" fundamentals stable will anchor efforts to address changes in a new landscape. He stressed that, in our endeavor to fully build a modern socialist China and to realize national rejuvenation, rural areas hold the most challenging and arduous tasks, but also the most formidable and broad-based strength to tap into. Such important remarks have identified the path which should be taken and the principles to follow while drafting the No. 1 Central Document and continuing with "sannong" work in the new development stage.

II. Overview

This year's No. 1 Central Document was prepared in line with the remarks of General Secretary Xi Jinping and outcomes of the 5th Plenary Session of the 19th CPC Central Committee. It aims to advance rural vitalization and accelerate agricultural and rural modernization by providing guidance on all work related to agriculture, rural areas and rural people. It consists of 26 articles in five parts. The key points can be summarized into "two ensured aspects, two well-started aspects and one strengthened aspect."

The "two ensured aspects" are the consolidation of the outcomes of the poverty eradication program and food security. The document highlights the importance of a transitional period for the smooth progression from poverty eradication to rural vitalization, and ensuring that large-scale poverty does not ever reappear. It also calls on provincial-level governments to maintain the acreage of grain planting and increase yields to ensure a constant annual production of 650 million-plus metric tons in the 14th Five-Year Plan period.

The "two well-started aspects" refer to making a good start in agricultural and rural modernization. In terms of agricultural modernization, China will strive to address two critical issues of seeds and arable land, strengthen the development of modern agricultural science and technology and farming equipment, build a modern rural industry system and agricultural operation system, and push for green development. In terms of rural modernization, under the framework of the rural development program, China will launch a number of key projects and activities to improve rural residents' living environment and access to infrastructure and public services, boost rural consumption, and promote urban-rural integration at the county level.

The "one strengthened aspect" refers to strengthening the CPC's comprehensive leadership on work regarding agriculture, rural areas and rural people. The document sets out specific requirements to enhance Party leadership on and work mechanisms for rural affairs and strengthen community-level Party building and governance in rural areas. It also stresses the need to ensure the input for prioritized development of agriculture and rural areas.

It is fair to say that the document is both timely and visionary. On one hand, it is firmly grounded in current realities by laying out tasks that must be completed this year. On the other hand, it is of strategic significance and shows the direction by specifying considerations and priorities for the 14th Five-Year Plan period. In conclusion, it serves both as a set of instructions for this year and a blueprint for the next five years.

That's all for my introduction. Now, my colleagues and I will take any questions you might have. Thank you.

Chen Wenjun:

The floor is open for questions. Please identify your news outlet before asking your question. Thank you.

CCTV:

Food prices generally rose last year and many countries around the world have tightened grain control in their favor. Given that societies are very concerned about food security issues, what is the current food security situation in China? What measures have been taken to ensure food security this year? Thank you. 

Tang Renjian:

Thank you for your question. Your first question regarding food issues references how all sectors of society are very concerned about this issue, so I will answer this question first. 

At the central rural work conference last year, General Secretary Xi Jinping made it clear that food security is the greatest priority for our country. Of all matters that concern the people, food security is the greatest. For a country like China with a population of 1.4 billion, ensuring food security is a constant, and I think we can never stress this enough. China has seen bumper harvests for several years in a row. Last year it reached 669.5 billion kilos, a record high, and an increase of more than 5 billion kilos compared to the previous year. The country's grain inventory is currently very abundant, so whether it is regarding production, sales, or inventory, I can report that China's food security is completely guaranteed and we can secure our rice bowls. In response to the COVID-19 epidemic last year, grain and all-important subsidiary agricultural products were well-produced, supplied, and sold. We withstood the big test. 

However, on the other hand, we must also realize that the situation of food supply and demand in China has always been tightly balanced. In the future 14th Five-Year Plan period, or a longer period of time, as the population continues to grow, especially with the upgrade of consumption, the demand for food will increase steadily. At the same time, external uncertainties and instabilities will also increase significantly. So on the issue of food security, we must not take it lightly and we must also make our outlook as secure as possible, produce as much grain as possible, and store more food. We also need to counter external uncertainties by stabilizing domestic production and supply, so that when we truly have food in our hands, we feel safe in our hearts. 

General Secretary Xi Jinping has emphasized that we need to tightly grasp food security initiatives, that the awareness of food security can't be keener, and that food production must be prioritized every year. His words fully demonstrate how food security plays an extremely important role in the overall strategic situation and the big picture of China's overall development and security. To ensure food security, the focus is to do well in the "two storings," that is, "storing grain in the ground and storing grain in technology." This is the material basis for ensuring national food security. Farmland is the lifeblood of food production. Without farmland, there is no food. In the next step, we will take hard measures to implement the most stringent farmland protection system, resolutely curb the "non-agriculturalization" of cultivated land and prevent the "non-grainization" of cultivated land, and firmly maintain the red line of 1.8 billion mu of arable land, and at the same time ensure that 1.55 billion mu of permanent basic farmland is planted with annual crops such as grains, melons, and vegetables. In addition, we must ensure that the planned 1.075 billion mu of high-standard farmland will be built and we must work hard to produce food. Speaking of high-standard farmland, this is a key tool for us to improve soil fertility and increase yield. Specifically, it is used to improve the standards and quality of construction to ensure that one season can produce 500kg of grain, while two seasons can produce 1 ton on such farmland. This is the high standard. At the same time, we should protect and make good use of black land, the gold standard of cultivated land, and we should especially preserve and build the northeast of China as the country's leading large granary. China only has finite land and water resources, therefore, the fundamental way to increase food production is to rely on science and technology for yields and benefits, insist on self-reliance in agricultural science and technology, and be determined to promote the food production industry and use modern agricultural technologies and material equipment to strengthen the support of food security. 

At the same time, we must also establish a mechanism guarantee of "two supplements," which is supplement by benefits and supplement by obligations. "Supplement by benefits" refers to allowing farmers to make additional profits from growing grain and to adhere to and improve agricultural prices and subsidy policies in terms of policy measures. "Supplement by obligations" is to consolidate the obligations and responsibilities of local Party committees and governments on food security. Therefore, this central rural work conference and the "No. 1 central document" both specify that the next step is to implement the same responsibility shared by the Party and government for food security, which builds on each provincial governor's responsibility system we stressed previously. Through these efforts, we will ensure that sown areas and output of grain in various provinces (autonomous regions and municipalities) can remain stable and continue to increase if conditions permit. 

To ensure supply, we must not only ensure the quantity but also consider ensuring diversity and quality as the next step. That's because maintaining diversity and quality simultaneously is not only to meet the needs of our market demand but also to increase farmers' income and improve agricultural efficiency. Therefore, we must further the supply side structural reform in agriculture, make it detailed and solid, and adjust and optimize the agricultural production structure, including the regional layout and product structure. We must also promote the cultivation of good varieties of produce, improve quality, build brands, and standardize production. This strategy was mentioned by General Secretary Xi Jinping at the central rural work conference. We understand that it means providing additional varieties of agricultural products at better quality, via smoother sales channels, with better profits, which can better meet the diversified consumption needs of urban and rural residents. Thank you. 

Red Star News:

The seeds are the "microchips" of agriculture, and the central government vows to "fight a turnaround" in the seed industry. I would like to ask how is China's seed industry situation right now and how will you "fight a turnaround" in the seed industry? Thank you.

Tang Renjian:

Your question is timely and to the point. I will be pleased to answer this question but as Mr. Zhang Taolin is responsible for the relevant work related to this issue, I would like to invite him to answer first.

Zhang Taolin:

Just now, Mr. Tang said that the way to ensure food security is to effectively implement a food crop production strategy based on farmland management and technological application. In terms of grain storage technology, the seed industry, including seed scientific research, is the most important aspect. The seed industry is the foundation of agricultural modernization and stands at the base of the entire agricultural industrial chain. Seeds are a vital part of ensuring food security, as is arable land. The CPC Central Committee and the State Council have paid significant attention to this issue; so do all sectors of society. Especially in recent times, the development, overall situation, and the future work of the seed industry have been a source of much concern. At the annual Central Economic Work Conference, the central government proposed to "fight a turnaround" in the seed industry. The just-released "No. 1 central document" for 2021 unveils a comprehensive arrangement for the future work of the seed industry. This is a key decision in the CPC Central Committee's policy deployment, as well as a significant initiative to ensure food security and consolidate the foundation of the seed industry to accelerate agricultural and rural modernization and improve people's livelihoods.

As to the development of the seed industry, generally speaking, we can guarantee the security of agricultural use of seeds and control its risks. Especially since the 18th CPC National Congress, the science and technology and industrial development of the seed industry has achieved significant results. Currently, China is self-sufficient in agricultural products seeds, especially grain seeds. The planting area of agricultural grain varieties independently selected by China accounts for more than 95% of the total planted area, mainly meeting the goal of "Chinese grain depends on Chinese seeds." The provenances of some characteristics of aquatic products, poultry, and livestock such as pigs, cattle, and sheep, are guaranteed to be based in China. At present, the self-sufficiency rate of core provenances of livestock and poultry, as well as aquatic products have reached 75% and 85%, respectively. All of these have provided essential guarantees and support for stable production and assured the supply of grain and important agricultural and sideline products.

Regarding the current situation of the seed industry, in the new development stage, China is working to foster a new development paradigm. We should note that, compared with the internationally advanced standards, there are still many areas of inflexibility and weak links in the seed industry, which urgently need us to create means to handle these issues.

First, there is a distinct gap in agricultural breeds. We all know that the per unit area yield of Chinese soybeans and corn is still not high; less than 60% of that of the US. The planting area of foreign vegetable varieties accounts for 13% of the total area. Of course, different varieties achieve different proportions. Among them, the import ratio of a few special varieties such as storable tomatoes and sweet peppers is relatively high, exceeding 50%. The efficiency of pig reproduction, feed conversion rate, and cows' annual milk yields are only about 80% of the advanced international level, especially of the white-feathered broiler, whose breeding hens are mostly imported. The development level of these breeds is directly related to the quality, speed, and benefit of the development of China's agriculture-related industries.

Second, the problem also exists within the seed industry itself. This issue mainly manifests in the insufficient protection and utilization of agricultural germplasm resources. Some local or rare germplasm varieties are at risk of extinction. Our independent innovation capacity is not strong, especially regarding theory and key and core breeding technologies. There remains a relatively large gap in advanced levels. The innovative competitiveness of seed companies is still weak. Some of them are overlapping projects, or projects of sub-scale, fragmented, with low yields.

Third, we need to take action to keep abreast of the times. The requirements to ensure domestic food and seed security of important agricultural products have become urgent. The diversified demands of agricultural products grow continuously when people pursue a better life. We lack high-quality species and products with special functions and we must cultivate more high-yield, high-quality, water-saving, feed-saving, and machine-friendly (suitable for mechanization), professional, and fine varieties. At present, the world's seed industry is embracing a scientific and technological revolution in modern biological breeding marked by technology integration development such as gene editing, synthetic biology, and artificial intelligence. Facing this situation, we should grasp the opportunity, accelerate innovation, and "fight a turnaround," to achieve leapfrog development in the seed industry.

Zhang Taolin:

What will we do next? The No. 1 central document has provided top-level and systematic planning to "fight to create a turnaround" in the seed industry, covering all areas from the protection of agricultural germplasm resources, scientific research and development on seed breeding, to overall management of the seed market. In general, we must stay alert against potential risks and focus on solving problems to ensure national food security and the quantity, variety and quality of major agricultural and sideline products. Meanwhile, we should follow the law of development in seed industry innovation to resolve bottlenecks, address inadequacies and further strengthen advantages. Specifically, we will carry out our work in the following five aspects.

First, we must protect our agricultural germplasm resources, which are the source of sci-tech innovation in the seed industry. We will intensify efforts to investigate and collect germplasm resources of crops, livestock and poultry, and aquatic products. Such fundamental work must be carried out well. We will also conduct accurate resource assessment and evaluation. A national germplasm resource bank will be established and a system for the protection and utilization of its resources will be established and improved.  

Second, we must promote independent innovation, which is a key factor for development of a sound seed industry. We will step up efforts for breakthroughs in core technologies. It is especially important to accelerate the implementation of major scientific and technological projects in modern agricultural biological breeding, deepen efforts in joint research on the development of crops, livestock and poultry, and take orderly steps to promote the industrial application of bio-breeding. Meanwhile, we should strengthen basic and advanced research. In particular, we will advance the construction of innovation centers such as Nanfan Silicon Valley.

Third, we must develop strong seed enterprises, which are key entities of sci-tech development as well as development of the overall seed industry. We will select a batch of superior enterprises and focus on providing them with strong support. Reforms to streamline administration and delegate power, improve regulation and upgrade services will be intensified. We will also pool resources from enterprises, universities, and research institutes; promote the cultivation, reproduction and dissemination of superior crop strains, and establish a sound commercial system for breeding. 

Fourth, we must upgrade agricultural breeding centers as the foundation for safeguarding our germplasm resources. We will develop modernized seed cultivation and production centers, national livestock and poultry breeding centers, and centers for cultivating original and superior aquaculture varieties. We will also improve the system of emergency support for superior varieties supply.

Fifth, we must optimize the market environment, which provides guarantees for innovation of the seed industry. To ensure a clean seed market environment, I think the key is to strengthen intellectual property rights protection, which requires innovation protection, strict product variety management and market supervision.

In general, we will accelerate the establishment of an innovative system in the seed industry, consisting of a system for the protection and utilization of germplasm resources, an industrial system and a governance system. We will also comprehensively raise our capacities of independent innovation, enterprise competition, seed supply support and law-based governance. That's all for my answer. Thank you. 

Tang Renjian:

The situation of China's seed market and seed industry is not as severe as people outside China expected recently. On the other hand, we do lag behind international advanced level in some varieties, areas and links. To sum up, there is no problem for us with the supply of some varieties essential to human survival. However, for many superior varieties, we do have a long way to go. What shall we do next? Our answer is to "fight to create a turnaround" in the seed industry.

Cover News:

The price of pork has always been a central issue in people's lives. We have noticed that prices have been rising recently. What has the ministry done to ensure the production and supply of market pigs? Will people be able to eat cheaper pork this year? Thank you.

Tang Renjian:

The price of agricultural products, and especially the price of "vegetable basket" products, has always been of great concern to consumers, and a central issue in people's lives. Since last year, we have been taking various measures to support the restoration of hog production capacity, and stabilize the production and market supply of hogs. According to the original plan, by the end of last year, the hog inventory was to be returned to that of normal years, in other words, 80% of the level in 2017. By the end of last year, the inventory had returned to more than 92%, which was 12 percentage points higher than expected. Therefore, recently, and especially before and after the "two festivals" (New Year's Day and Chinese New Year), there has not been such a substantial increase as in the previous period. At present, the overall momentum of market supply and demand remains good.

Going forward, as the newly increased hog production capacity gradually turns into pork production, the tensest period of pork market supply has now passed, and the relationship between supply and demand will become more and more relaxed. It is estimated that in the first quarter of this year, around March, the pig population will be around 40% higher than it was during the same period last year. By the second quarter, or around June, the hog inventory will have returned to the normal level of 2017. In the second half of the year, market pigs slaughtered and pork supply will gradually return to the normal annual level.

This year's No. 1 central document attaches great importance to this issue, and requires the protection of hog production capacity and improvements to the long-term mechanism for the stable and orderly development of the pig industry. Therefore, we should not only focus on the current recovery, but also on stable, long-term production. We are very familiar with the hog cycle. We were thrown off course by this cycle, and cannot let this happen again in the future. For that reason, we are now studying and considering — in addition to comprehensive measures — how to preserve the hog production capacity. When there is large supply, prices are low, and some enterprises cannot pay their bills, effective measures are needed to prevent the enterprises from killing sows and cutting the size of their pig farms. We should focus on this key task to preserve production capacity and manage the hog cycle. We will closely monitor the dynamics of production development, and be quick to introduce specific measures to stabilize and preserve production capacity, so as to ensure the stable development of the pig industry.

I would also like to mention something I observed during my travels to Beijing, Tianjin and other places before the Spring Festival to inspect the production and promotion of the "vegetable basket." The first impression at that time was that generally, we felt satisfied that although many people stayed where they worked during the Spring Festival holiday, the growth of production was sufficient. We were also thinking of various ways to break through blockage points in the market. But on the other hand, we saw that the price of some items had fallen, such as eggs, which dropped to around 8 yuan per kg, and the cost is 8 yuan per kg. Therefore, the price of agricultural products, including "vegetable basket" products, should not be as low as possible, because if the price is too low, farmers will no longer be able to produce them and the next cycle will be full of fluctuations. Therefore, we should work to find a balance of interests. Thank you.

NTV.cn:

Recently we have seen that vegetable prices have been increasing to varying degrees in some places, and people are very concerned about their "vegetable baskets." I'd like to ask the ministry about the production, supply and market trends of "vegetable basket" products. Thank you.

Tang Renjian:

This is quite a comprehensive issue. As I just answered the question on pork, I'll let Mr. Zhang Taolin take this question. 

Zhang Taolin:

The "vegetable basket" is indeed closely related to the livelihood of the people. Just now, Mr. Tang answered the question on pork. I would like to answer the question on vegetables.

Vegetable production is quite seasonal, especially during March and April when winter and spring vegetables rotate to summer vegetables, and the number and variety of vegetables available on the market decrease and prices rise relatively, which is what we usually refer to the "off-season of spring." Affected by the previous cold wave and low temperatures as well as rising production and distribution costs and other factors, vegetable prices have recently increased in some areas. I believe this is still a seasonal and regular fluctuation.

The Ministry of Agriculture and Rural Affairs (MARA) has set up a special work team to stabilize the yield and guarantee the supply of products in the "vegetable basket." First, we have strengthened monitoring of the production and prices. Second, we have organized experts and agricultural technicians at all levels to provide timely technical guidance to ensure the steady production of vegetables. Third, we have guided localities to select and identify some reserve bases for emergency vegetable supplies, set up hotlines, and strengthen production and marketing coordination to resolve prominent problems and remove the barriers of production.

Under our current arrangements, the planting acreage of winter and spring vegetables nationwide is 85 million mu (about 5.67 million hectares), an increase of 1 million mu compared with previous years. Especially since last November, the average monthly volume of vegetable products for sale on the market has remained more than 54 million tons, up 2% year on year. Fluctuations in weather are relatively large currently. As it gets warmer, vegetable production will gradually enter its peak season. Therefore, based on previous trends, the production capacity and supply of main vegetable varieties can be guaranteed. It is also expected that prices will follow the trends of seasonal fluctuation as defined by regular production years and feature a general downward trend.

Next, we will continue to step up efforts to stabilize yields and guarantee the supply of the vegetables. We will guide localities promptly to coordinate epidemic prevention and control and vegetable production to ensure that vegetables can be produced and supplied as needed. Thank you.

China Review News Agency:

2020 was the final year in the poverty alleviation campaign. All 832 poverty-stricken counties in China have been lifted out of poverty but some of them are still at the risk of falling back into poverty. Going forward, the key is to ensure the smooth transition from consolidating and expanding the achievements in poverty alleviation to rural revitalization. What are the plans and detailed measures in this regard? Thank you.

Tang Renjian:

In addition to food security, this issue is another major concern of all parties both at present and in the future. MARA has proposed a "two-ensured-aspects" approach to this year's work and during the 14th Five-Year Plan period (2021-2025). One goal is to ensure a constant annual grain production of 650 million-plus tons and the other is to ensure that no large-scale poverty ever appears again. I think this answers your question.

General Secretary Xi Jinping has reminded us long before that being lifted out of poverty is not an end in itself but the starting point of a new life and a new pursuit. After the tasks of poverty alleviation in the new era are fulfilled, work related to agriculture, rural areas, and rural residents should shift to comprehensively promote rural revitalization. The central government calls for consolidating and expanding the gains in poverty alleviation to make a smooth transition to rural revival. The bottom line mentioned above is to ensure that large-scale poverty doesn't occur ever again. People living in poverty-stricken areas have cast off poverty, which means that their living requirements for food and clothing have been largely met and they have access to compulsory education, medical care, and housing. Nonetheless, the foundation of their development, especially their capacities for self-development, is not strong, and the basis of their industries — and fundamental support — is not that solid. Hence, consolidating the outcomes of poverty alleviation and preventing falling back into poverty remains an important task. This year and during the 14th Five-Year Plan period, we require that priority be given to the smooth transition of consolidating and expanding the achievements in poverty eradication to rural revitalization. We will continue to fully perform our duties and ensure that there is no gap in our work and policies.

The general requirement is to set a five-year transition period from the date of eradicating poverty in those counties that have ended poverty. General Secretary Xi Jinping and this year's No. 1 central document require that major policies should be stable on the whole and at the same time be adjusted and optimized on a case-by-case and classified basis to give counties a leg up to get them going. To be specific, the key for those counties that have been lifted out of poverty is to make efforts in dynamic monitoring and assistance to prevent them from falling back into poverty. There is only one request: early detection, early intervention, and early assistance because if there is no detection, action will come too late. Industrial assistance is still the fundamental way to help people alleviate poverty and consolidate relevant achievements. We need to focus on this key point and continue to strengthen it. The main approach is to reinforce the weak points, including technology, facilities, and capital, so that the industries that have aided poverty reduction can be upgraded. To provide follow-up support to the 9.6 million people relocated from inhospitable areas, the key is to still develop industries to boost employment and increase incomes and make them better-off as soon as possible. Meanwhile, efforts should also be made to improve infrastructure and provide public services, to help relocated citizens integrate into their new communities. In addition, we need to enhance regular assistance to low-income people in rural areas, who sit just above or under the poverty line. 

We will make areas that have cast off poverty a priority in rural revitalization and give them greater support. An important measure we need to adopt is to continue identifying priority counties in the western region that need assistance in terms of rural revitalization. We will focus our support on fiscal and financial services, land, human resources, infrastructure, and public services, etc. In addition, we will also encourage localities to select some priority counties themselves to receive rural revival support.

Ensuring no large-scale poverty occurs ever again is the bottom line, and we need to promote a steady transformation of the work system as well. In the fight against poverty, relevant central government departments have issued more than 200 policy documents, forming an effective policy and work system regarding organization and mobilization; factors in production guarantees, policy support, coordination, and assistance; and assessment and supervision, among other areas. Since the goals of poverty alleviation have been achieved, we need to adapt to the shift of work focus to comprehensively promote rural revitalization and promote effective coordination between the poverty reduction work system and that of the revitalization to gradually realize the smooth transition from focusing on poverty alleviation to comprehensively promoting rural revitalization. Thank you.

Phoenix TV:

The fifth plenary session of the 19th CPC Central Committee has noted that China will implement an action plan for rural construction. What are the priorities of the rural construction initiative and what are the construction ideas? Thank you.

Wu Hongyao:

I'm glad to answer this question. In the process of rapid industrialization and urbanization the shape of the countryside is rapidly evolving and the village pattern is being transformed and reshaped. What kind of villages to build and how to build them are questions of the times that we are facing and must answer. As you've mentioned, the fifth plenary session of the 19th CPC Central Committee has noted that China will take actions to develop rural areas, and stressed that the construction of the countryside should be placed in an important position in the construction of socialist modernization. This year's "No.1 Central Document" has also made comprehensive plans in this regard. Just now Mr. Tang stressed that works should be done this year to ensure a good start in agricultural and rural modernization. Specifically, to properly plan and carry out the rural development program is one of the important tasks for rural modernization. The rural development program should include both hardware and software. The hardware is to strengthen the infrastructure of rural areas, and the software is to strengthen public services in rural areas. In the meantime, efforts should also be made to promote the integrated development of urban and rural areas. I would like to talk about the specific deployment of the rural construction action from the following four aspects.

First, construction plans for rural areas should be formulated. Rural planning is the blueprint for rural construction. Without planning, houses will be built disorderly and there will be illegal appropriation of land, which will cost a lot of administrative efforts. Therefore, planning should always take priority before the construction begins, so as to properly determine the pattern of villages. Villages with advantages and needs can start construction earlier. In the meantime, we stress that construction plans should be formulated based on the current conditions. Practicability should be emphasized. Large-scale demolition and reconstruction should be avoided. The unique landscape of each village should remain unchanged, in a bid to keep its original sense of rural life and avoid homogenization in rural construction. The dismantling and merging of villages should be strictly regulated, and no farmers should be forced to move into apartment buildings against their will.

Second, rural living environments should be improved. Since the campaign to improve rural living environments was launched in 2018, the dirty, disorderly, and unsanitary parts of rural areas have been significantly improved, especially garbage treatment. The major field of weaknesses currently exist in rural toilets and sewage treatment, particularly the latter. Next, we will launch a five-year action plan to further improve rural living environments. This will include renovating rural toilets in an orderly and categorized manner based on local conditions, and emphasizing sewage treatment efforts, in a bid to effectively improve the livability of rural areas and people's sense of satisfaction.

Third, rural infrastructure should be developed. Infrastructure facilities in rural areas have been significantly improved in recent years. Basically, all administrative villages can be reached by roads and have access to water, electricity, and gas supplies. However, there are still obvious weaknesses in the internal infrastructure of villages. In the next step, we should continue to focus on the construction of public infrastructure in rural areas, and make every effort to reach more villages and households. The villages in this regard refer to non-administrative ones. For example, since rural areas have access to safe drinking water now, we need to improve the ability to guarantee that water supply. Given that electric power in rural areas is basically ensured, we also need to improve the capacity of its supply for production activities in rural areas. As basically all administrative villages have tarmac and cement roads, we need to accelerate the effort to build main roads inside non-administrative villages to help develop local industry, tourism, and resources. In the meantime, we will strive to solve the "last-kilometer" problem existing in the storage, cold-chain logistic, and delivery process between villages and towns. A long-term management, maintenance, and operation mechanism should be established, so as to bring convenience and benefit to the general public in the long run.

Fourth, public services in rural areas should be improved. Currently, we have worked to basically ensure the availability of public services in rural areas. But the quality of such services has yet to be improved when compared with those of cities as well as farmers' actual needs. Next, we need to establish a balanced allocation mechanism of public resources between urban and rural areas, paying attention to key issues farmers are concerned about, such as education, medical care, elderly care, and social insurance. We will continuously promote the equitable access to basic public services in urban and rural areas, in a bid to essentially achieve fairness out of the current inclusiveness.

In addition, the document also stressed that rural construction does not mean blindly constructing in rural areas. Instead, it requires coordinated efforts with specific focuses. County level areas should be taken as important focal point in the integrated development of urban and rural areas. We need to coordinate the developing efforts of infrastructure and public services between urban and rural areas with layered focus, and work to satisfy farmers' varied needs, so as to make sure that the functions are complementary, and the resources are well-coordinated. General Secretary Xi Jinping stressed that rural construction is undertaken for farmers, and their will must be respected. We will take a face-based, bottom-up approach, and do everything in our capacity to bring tangible benefits to the people.

Tang Renjian:

"Constructing for farmers" is very important, and this is not only what General Secretary Xi Jinping has stressed, but also the specific requirement stated in the "No.1 Central Document." Rural construction is not for you or me, but for farmers. Their needs and feelings must be taken care of, and all works must be done based on the actual situation of rural areas. We must do well in this regard during the 14th Five-Year Plan period, fighting against subjective will, formalism, and bureaucracy which could ruin our efforts. This is very important. Thank you.

CCTV Agricultural Rural Channel:

My question is about rural residential land. After some farmers move to the city, their rural residential land becomes inefficiently used as its residential function is less prominent. This is essentially a waste of land resources. Given that the "No.1 Central Document" noted that farmers settling in the city should be ensured the right to use their rural residential land, how can we revitalize this rural residential land while ensuring their right to use?

Wu Hongyao: 

In recent years, the central government has published a series of policies to strengthen the management of rural residential land in accordance with the law, and in general to advance the reform of the system of rural residential land in a steady and prudent manner and effectively protect the legitimate rights and interests of farmers. Last year, the Office of the Central Leading Group for Rural Affairs and Ministry of Agriculture and Rural Affairs, in collaboration with relevant departments, launched a new round of trial reforms on the system of rural residential land in 104 counties and three prefectural-level cities across China. The core of the pilot scheme is to explore forms of separation of ownership, eligibility and use rights on rural residential land. The trial reform prioritizes protecting the land rights and interests of farmers who have registered as urban residents. . We are exploring mechanisms to safeguard farmers' eligibility, and at the same time, increase the property income of farmers via transfer, mortgaging, voluntary paid withdrawal and paid-use of their land usage rights. 

The reform of rural residential land is in the vital interest of all farmers, and is a sensitive and complex issue. We must act on the requirements of the central government and be patient in dealing with the issue. We should strictly keep the three bottom lines: never change public ownership of land, ensure that China's arable land remains at or above the red line, and fully protect farmers' interests. At the same time, we should make it clear that it's forbidden for urban residents to build villas and private clubs on rural residential land. It's also forbidden to force famers to give up their homesteads and move into apartment blocks. We should always make sure that reform is moving forward in the right direction. Thanks.

National Business Daily: 

Recently, the General Office of the Ministry of Agriculture and Rural Affairs published a notice on encouraging original innovations in agricultural genetically modified organisms (GMOs) and regulating biomaterial shifts. Does it mean that the industrialization of agricultural GMOs is being prioritized into the fast lane of development? And why did the ministry publish the policy? Thanks.

Zhang Taolin:

Thanks for your attention to this issue. My colleagues have answered questions on GMOs many times. China's attitude toward GMOs is consistent and clear. That is, insisting on independent innovation in research, ensuring safety in promotion and application, and implementing strict supervision in management. Publishing the notice is one of our daily jobs, which demonstrates our work requirements to promote innovation on the one hand and strengthen management on the other hand. You may have noticed that the Central Economic Work Conference and the "No. 1 Central Document" all made it clear that we should respect science, tighten supervision, and push forward with the industrialization of bio-breeding in an orderly manner. Agricultural GMOs are a major part of modern bio-breeding technology, which is also the fastest-growing and most widely used modern biological technology. According to statistics, since GMOs were approved for commercial use in 1996, genetically modified crops have taken up over 40 billion mu of land across the world, spanning 29 countries. That means 29 countries have planted genetically modified crops. There are also more than 40 countries and regions that import genetically modified agricultural products. For the industrialization of agricultural GMOs, we will continue to push forward in line with the principles of respecting science, strict management, abiding by laws and regulations,, and ensuring safety, so that GMOs and other modern agricultural biological breeding technologies can better benefit our people. Thanks.

Farmers' Daily, farmer.com.cn:

General Secretary Xi Jinping pointed out that we need to deepen rural reform and speed up reforms regarding key links in rural areas. What major measures will you take to deepen rural reform this year and during the 14th Five-Year Plan period? Thanks. 

Tang Renjian:

Rural reform mainly concerns micro business entities, market systems and support and protection policies. Over the past years, we have carried out reform in various aspects. Entering the new stage of development, the biggest driving force to advance rural vitalization across the board is to reform. However, we are facing new requirements, limits, environment and conditions in deepening reform, which urges us to push forward with it in a steady, prudent and appropriate manner and apply down-to-earth measures for solid progress. We should especially avoid flip-flopping on reform issues. General Secretary Xi Jinping has repeatedly emphasized that reform concerns famers' fundamental rights and interests, so we should stay patient and proceed when we are sure what measures are fit. The Office of the Central Leading Group for Rural Affairs and Ministry of Agriculture and Rural Affairs will act in line with the general spirit of rural reform. I'd like to invite Mr. Wu to introduce the concrete measures.

Wu Hongyao:

Mr. Tang just briefed us on the general principles and major points in deepening rural reform. Now I'd like to talk about the concrete measures. 

Since the Third Plenary Session of the 18th CPC Central Committee, the CPC Central Committee has set out an overall and systematic plan to further agricultural and rural reform. We surmounted many obstacles to carry the reform further by formulating a series of major reform plans and laws and regulations. The main framework for improving the healthy development of agriculture and rural areas with "multiple pillars" has been established. For the next step, to advance rural vitalization across the board and accelerate agricultural and rural modernization in the new stage of development, we should continue to vitalize resources in rural areas by stepping up reform in major links and areas. The "No. 1 Central Document" introduces the main tasks regarding this, and the three major aspects are as follows:

Firs, we must consolidate and improve the basic rural operation system. After years of effort, we have basically completed the work to determine, register and certify contracted rural land rights. Rights on 1.5 billion mu of contracted land have been certified and over 200 million famers have received their certifications. For the next step, we should consolidate and make the best use of the progress we have made. We will carry out trial reform on extending the second round of land contracts for another 30 years upon expiration, and keep land contracting practices stable and unchanged on a long-term basis. In the meanwhile, we will update the agricultural operation system and focus on fostering the two new agribusiness models, namely, family farms and farmer cooperatives, while supporting the development of organizations that provide specialized agricultural services. This will help us guide small household farmers to move forward with agricultural modernization. This year, we have another major rural reform task to complete, which is to basically finish the reform of rural collective property rights system. It consists of three parts: first, to confirm the members of collective economic organizations across the board; second, to steadily push forward the reform of collective operating assets based on a shareholding cooperative system; and third, to actively search for effective ways to develop a new type of the rural collective economy.  

Second, we will deepen reforms of the rural land system, focusing on contracted land and rural homesteads. We've mentioned these two areas just now. The new round of pilot reforms of the rural homestead system has started. As this involves the vital interests of rural residents and the situation is quite complex, we will deepen trial reforms, making innovations before dispensing with the old patterns, and carrying out reforms in a steady and prudent manner. While completing our basic work in investigation, confirmation and registration of rural homesteads, we will focus on separating ownership, qualification and use rights and seek to tangible achievements in our pilot reforms. Another part of our reform is rural collective land for development purposes. As the newly revised Land Administration Law has taken effect, the legal barrier on marketization of these lands has been removed, but there needs further clarification on trade requirements and procedures, on ownership, qualification and use rights, and on distribution of income as we further explore such marketization. Moreover, in terms of rural land accessibility, the No.1 central document clarifies the need to make good use of idle and existing land for construction, carry out negative list management, and prioritize land use for rural industrial development and rural construction. In view of the actual needs in developing industries like rural tourism, we will explore flexible and diverse land use measures and ensure that land accessibility won't stand in the way of rural vitalization.

Third, we will establish a guarantee system to prioritize the development of agriculture and rural areas. The key to rural revitalization is to prioritize the development of agriculture and rural areas through huge investment and solid efforts. The No.1 central document has issued a specific requirement on increasing investment and put forward major policy measures to guarantee spending. It has introduced five measures on government spending. First, the general public budget should prioritize spending on both agriculture and rural areas. Second, central government spending on agriculture and rural areas should be expanded. Third, we need to establish and implement a set of evaluation methods for increasing the share of revenue from land transfers diverted to agriculture and rural areas. We introduced these methods last year and we need to review and evaluate the implementation. Fourth, we need to further improve the long-term mechanism for integration of different rural development funds. Fifth, we must support local governments in issuing general bonds and special bonds for modern agriculture facilities and rural development.

It made four requirements in regard to financial support. First, it is necessary to increase medium- and long-term credit support for agricultural and rural infrastructure development. Second, we have to expand small loans to rural businesses. Third, we must encourage the development of special financial products to support new agricultural businesses, as well as foster new industries and new business models in rural areas. Fourth, we have to scale up the practice of awarding instead of subsidizing special agricultural product insurance around the country. Moreover, we must also support the establishment of rural vitalization funds through market-based measures to mobilize social capital in its support to rural industrial development. Thank you.

Chen Wenjun:

As time is limited, we will take one more question.

China National Radio (CNR):

Rural vitalization efforts have been carried out in China for some time. At the beginning of this century, China put forward the idea of building a beautiful countryside. The country put forward the strategy for rural revitalization in 2017 and introduced the National Rural Vitalization Strategic Plan in 2018. In 2020, rural vitalization centered on both the central rural work conference and proposals for formulating the 14th Five-Year Plan (2021-2025). My question is, how the form, content and targets of the rural vitalization strategy has evolved over the years? Thank you.

Tang Renjian:

This is a good question. Rural vitalization is not a new concept. It was first introduced during the 19th CPC National Congress and has been making steady progress over the past few years. However, we formerly focused our efforts on poverty alleviation. What's different now is that we now highlight the all-round vitalization of the rural areas. After the strategy was introduced in the 19th CPC National Congress, the CPC Central Committee and State Council formulated a guideline which charted a strategic roadmap for rural vitalization. Shortly, the National Rural Vitalization Strategic Plan was published, outlining the targets and policy framework for the ensuing five years. Moreover, the CPC Central Committee also published a regulation on rural work, a major document that systematically specifies the CPC's all-round leadership on rural work, aiming to transform the political advantage of the Party's leadership to impetus in the cause of advancing rural revitalization. Currently, the Standing Committee of the National People's Congress is reviewing a draft law on promoting rural vitalization, which will offer a fundamental institutional guarantee for making further progress in the strategy. We also established a series of special policies focusing on rural industries, rural governance, social etiquette and civility, and urban-rural integration development. Generally speaking, multiple institutional framework and basic policies for rural revitalization have been established and various valuable explorations are seen in different regions around China.

As we enter a new development stage, our priority in rural work has been shifted to comprehensive advancement of rural vitalization. It's time for full-fledged efforts. The central rural work conference last year and this year's No.1 central document have further mobilized efforts and mapped out plans to boost rural revitalization. Many of the questions we answered just now are related to the all-round approach for rural vitalization. To put it simply, we aim to adopt more forceful measures and mobilize stronger efforts to boost the strategy. You may find three changes: we have evolved from top-level planning to all-round implementation of specific measures; from explorations and pilot programs to a country-wide campaign; from focusing on key areas to comprehensively covering our efforts in vitalizing industry, talent, culture, the environment, and organizational structures in rural areas. Through all-round efforts, we will improve areas of weakness in modernization of agriculture and rural areas and make sure that the development of agriculture and rural areas won't fall behind our overall national modernization effort. This is how the concept of rural revitalization has evolved through the years. Thank you.

Chen Wenjun:

Thank you, Mr. Tang and other speakers today. Thanks to the friends from the media. This is the end of today's press conference. Goodbye.

Translated and edited by Zhang Rui, Liu Qiang, Lin Liyao, Li Huiru, Xiang Bin, Zhang Liying, Xu Xiaoxuan, Zhu Bochen, Fan Junmei, Wang Qian, Li Xiao, Wang Wei, Wang Yiming, Yang Xi, Guo Yiming, Cui Can, Zhang Junmian, David Ball, Jay Birbeck, Geoffrey Murray, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Zhao Chenxin, secretary general and spokesperson of the National Development and Reform Commission

Zeng Yixin, vice minister of the National Health Commission (NHC)

Guo Yuqiang, director of the Department of Child Welfare of the Ministry of Civil Affairs

Zhang Ying, director of the Department of Employment Promotion of the Ministry of Human Resources and Social Security

Wang Yang, chief engineer of the Ministry of Transport and director of its department of highways

Zhu Xiaoliang, director of the Department of Market Pperation and Consumption Promotion of the Ministry of Commerce

Wang Bin, inspector of the Bureau of Disease Prevention and Control of the NHC

Chairperson: 

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date: 

Jan. 27, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning and welcome to this press conference. Recently, the general offices of the Communist Party of China (CPC) Central Committee and the State Council issued a circular on how to ensure services and supplies to people who stay put during the Spring Festival holiday. The document has drawn significant attention from across society.

To help people better understand the circular, we have invited Mr. Zhao Chenxin, secretary general and spokesperson of the National Development and Reform Commission; Mr. Zeng Yixin, vice minister of the National Health Commission (NHC); Mr. Guo Yuqiang, director of the child welfare department of the Ministry of Civil Affairs; Ms. Zhang Ying, director of the employment promotion department of the Ministry of Human Resources and Social Security; Mr. Wang Yang, chief engineer of the Ministry of Transport and director of its department of highways; Mr. Zhu Xiaoliang, director of the department of market operation and consumption promotion of the Ministry of Commerce; and Ms. Wang Bin, inspector at the bureau of disease prevention and control of the NHC. They will brief you on the circular and answer your questions. Now, I would like to give the floor to Mr. Zhao Chenxin.

Zhao Chenxin:

Good morning, friends from the media. 

Currently, the coronavirus continues to spread abroad, while clusters and sporadic cases have been reported domestically, intensifying the pressure of "preventing inbound cases and domestic resurgence." As the Spring Festival holiday approaches, we will see an increase in domestic travel, returning to their hometowns and taking part in gatherings. This means that there is a higher risk of transmission and a more complex situation for epidemic prevention and control. In this context, calling on people to avoid non-essential travel and ensuring the livelihoods for those who stay put are significant factors in reducing the risks of transmission, protecting people's lives and health, and guaranteeing people a happy, peaceful, and safe Spring Festival.

Approved by the CPC Central Committee and the State Council, the general offices have recently issued a circular on how to secure services and supplies for people who stay put during the Spring Festival holiday. According to the circular, local authorities and government departments should perform their regular duties well and strengthen epidemic control. At the same time, they are required to focus on the following seven aspects in response to an increase in the number of people who will stay put during the holiday.

First, guide people in a reasonable and orderly way. All residents in high-risk COVID-19 regions shall stay where they currently reside; in principle, people in medium-risk regions should also stay put; and those in low-risk regions are advised to also do so. In addition, staff members of government agencies, public institutions, and state-owned enterprises shall take the lead in staying where they live and work during the holiday.

Second, ensure the supply of daily necessities. Effective measures should be taken to ensure the supply of daily necessities and energy, as well as the availability and price stability of major commodities. Efforts should also be made to meet people's needs for various online and offline cultural, sports, and tourism activities during the holiday.

Third, improve management and services. Local authorities and government departments should enhance grid-based and meticulous management of communities in both urban and rural areas; reinforce the livelihoods and safety management of people who stay put during the Spring Festival holiday; and provide subsidies and assistance to special groups and people living in difficult circumstances.

Fourth, guarantee smooth logistics and transportation services. Work should be done to ensure convenient and orderly public transport services; provide better transport services for the elderly and other special groups; facilitate the transportation of supplies for emergencies, work, and daily life; and ensure unimpeded delivery via postal services.

Fifth, protect lawful rights and interests. Enterprises are encouraged to guide employees to stay at work while guaranteeing their livelihoods as well as salary and vocation rights. Efforts should also be made to ensure that those who work during the holiday enjoy due overtime payments in accordance with relevant laws.

Sixth, build a positive environment. Local authorities and government departments should publicize the measures to ensure the supply of daily necessities, improve transport services, and suitable care for the needs of the people. They should also pay close attention to hotly debated issues on staying put during the holiday and give a timely response to people's concerns.

Seventh, ensure full implementation. Local authorities and government departments must constantly hold in their hearts the interests and concerns of the people, take coordinated measures to strengthen epidemic control, and guarantee services and supplies with high political awareness to ensure that the people enjoy a safe and secure Spring Festival holiday.

We noticed that many localities have introduced initiatives, policies, and measures to encourage people to stay in their current place of residence during the holiday, and many people have decided to stay put. However, some are concerned as to whether remaining where they are is mandatory, and whether they will face strict prevention and control requirements if they have to return to their hometowns. Regarding those concerns, I would like to emphasize two points:

First, policies concerning Spring Festival travel are implemented based on different categories and levels. Areas with medium and high risk of COVID-19 should strictly carry out relevant regulations that are clearly stated in the document. People in low-risk areas are encouraged to spend the Spring Festival where they work and avoid nonessential travel. If they really have no alternative, we hope they avoid traveling to medium- and high-risk areas. When implementing these policies, local governments at different levels should not put forward additional requirements of their own, and it is absolutely forbidden to impose total uniformity on the implementation process. People's travel and return to their hometowns should not be prohibited, and more support and convenience should be provided to the general public.

Second, we should ensure people's livelihood is well-supported when spending Spring Festival where they work. The notice clearly states that leading officials of local governments across the country should act and make arrangements on strengthening the coordinating works, improving detailed measures, and fulfilling government's responsibilities at different levels, in a bid to ensure the supply of daily materials and the stabilization of prices during the Spring Festival holiday. Local governments should make coordinated efforts to support services such as transportation, logistics, salary and vacation, culture and sports activities, and social assistance. They should work to solve people's problems and difficulties in a timely manner, so that everyone can feel relieved and spend an enjoyable Spring Festival holiday where they work.

Last but not least, I want to say that practice has proven that China did a good job in epidemic prevention and control last year, and this has benefited not only the general public, but also our country as a whole. However, to prevent and control the epidemic requires everyone's participation. Of course, there are many ways of doing this, and choosing to avoid Spring Festival travel is one of the important ways currently. In regard to nationwide initiatives, the needs for epidemic prevention and control, as well as the support provided for people's livelihood, avoiding traveling during the Spring Festival holiday is the greatest support for the prevention efforts. In doing so, we can also celebrate a more meaningful Lunar New Year.

That's all of my introduction. My colleagues and myself are willing to answer your questions later. Thank you.

Shou Xiaoli:

Thank you, Mr. Zhao. Next, Mr. Zeng will have the floor.

Zeng Yixin:

Ladies and gentlemen, Mr. Zhao has elaborated on the arrangements for the Spring Festival holidays just now. Next, I'll brief on epidemic prevention and control.

As we all know, COVID-19 cluster infections have been spotted in China since last December. Multiple transmission chains have occurred simultaneously in the same province and city, and cases linked to cluster infection are seen amongst family members and communities. In general, new elements have emerged amid the current epidemic prevention and control works.

The first change is that epidemics often occurred in cold northern part of China. Virus can survive for a longer time in low temperatures. Besides, current epidemics are found mostly in rural areas where these are relatively fewer preventive efforts are available, thus, it is easy for the epidemic to spread.

The second change is that the number of imported COVID-19 cases has surged significantly. The average number of such cases per day in January was nearly twice that recorded last November, so China still faces mounting pressure in preventing imported COVID-19 cases.

The third change is that, as the Spring Festival approaches, the flow of people and logistic services will increase, and there will be more cluster activities such as group dining and gatherings. These will increase the risks of the spread of epidemic. Therefore, it is estimated that the risks of regional spread caused by imported COVID-19 cases and relevant objects are still high, and the epidemic situation is severe and complex.

To effectively cope with the emerging challenges of epidemic prevention and control, meanwhile working with relevant government bodies to prevent epidemic during the Spring Festival travel rush and support people to spend the holiday where they work, we will carry out work in the following aspects:

First, we will continue to take measures to reinforce weak links existing in epidemic prevention and control in rural areas. As I mentioned, current epidemics are found mostly in rural areas. In addition to urging all areas to strictly implement the measures listed in work plans for epidemic prevention and control in rural areas in winter and spring, such as nucleic acid testing, epidemiological investigation, quarantine, patient transfer, medical treatment, and information release, we will further specify the requirements needed for travel for people in areas with different risk levels. In regard to the increasing demand of nucleic acid tests for those returning to their hometowns during the Spring Festival, we will help local government improve their testing capabilities, working proactively to reduce the cost of these tests, making arrangements to help improve timeliness and convenience. China can offer 15 million nucleic acid tests for COVID-19 daily at present, and this is the figure when using a single tube, which means using one test tube to contain the samples collected from one person. If we use one test tube to contain five or even ten persons' samples, the nucleic test capacity will be further improved, and this will provide strong support for the epidemic prevention and control works.

Second, we will further standardize the handling of clustered epidemics. We have comprehensively sorted out some of the problems exposed through handling the epidemics in places such as Xinjiang's Kashgar, Hebei's Shijiazhuang, and Heilongjiang's Suihua, and refined, actualized and standardized the process of handling cluster cases throughout. We asked local governments at all levels to promptly activate their emergency command systems and quickly organize specialized epidemiological investigations and contact tracing. This work is particularly important. Once an epidemic occurs, we must locate the source as soon as possible and understand how the epidemic has occurred so that we can better take targeted measures to control the outbreak. We must then promptly, scientifically, and accurately demarcate and adjust the medium and high-risk areas, implement measures such as community and individual isolation control and nucleic acid testing in different regions and levels, and strive to keep the initiative in epidemic prevention and control in our hands. 

Third, we must continue to prevent imported cases. Above all, it is necessary to further strengthen the standardized management of the entire chain for international arrivals, from the airport to quarantine venues, and then to the community. We require all localities to prepare enough isolation rooms, comprehensively strengthen the management of isolation sites, standardize services, and avoid cross-infection. Moreover, we demand strict implementation of the responsibilities of industries and entities such as those that import cold chain food and goods. Relevant key practitioners must strictly perform personal protection and key personnel should be given priority when it comes to receiving the COVID-19 vaccine. This work is ongoing. 

Fourth, we will continue to intensify the popularization of health science. Recently, various health science popularization activities have been carried out with regards to winter and spring pandemic prevention and control, and personal protection, etc. We shall widely popularize scientific protection knowledge, encouraging the masses to develop good habits in mask wearing, frequent hand washing, and social distancing. People are also advised to keep personal and environmental hygiene, maintain good ventilation, enhance personal protection awareness, and improve self-protection capabilities. This aspect is particularly important because if everyone is able to do their part well, these measures are practically effective for epidemic control.

The above is my brief introduction to the current situation. Next, my colleagues will be happy to answer your questions. 

Shou Xiaoli:

Thank you, Mr. Zeng. Now the floor is open to questions. Please inform us of the news organization you are with before asking questions.

China Daily:

It seems that it is the first time in history that people have been encouraged to stay where they are for the Spring Festival holiday. Will more cultural and leisure products and services for people who do not return to their hometowns be provided, and how will a good atmosphere be created so that everyone feels at home if they choose to stay? Thank you. 

Zhao Chenxin:

Thank you for this very important question. We need to provide good services as people are advised to stay where they work during the holiday. We will offer more colorful cultural and sports-related activities so that people who stay during the holiday can feel at home, and enjoy a good new year's celebration. 

In order to create a good festive atmosphere and better meet the spiritual and cultural needs of those who stay during the Lunar New Year, it has been clearly stated that the supply of cultural and sports programs via the internet, TV, and radio be increased, as well as the provision of free online entertainment and free screenings of films for a limited time on video streaming apps. Under the premise of doing a good job of epidemic prevention and control, as well as implementing staggered appointments to limit the number of visitors, it is necessary to ensure set opening hours for public spaces and the supply of tourism products. The relevant departments are making full and thorough preparations in accordance with these requirements, and will solidly promote various measures to be put into practice so that people can enjoy these conveniences. 

First, in terms of enriching the supply of programs, we encourage art and theater troupes and groups in low-risk areas to increase the frequency of performances in spacious venues and conduct online broadcasts under the premise of effectively preventing and controlling the epidemic. We guide local satellite TV stations to arrange and broadcast a series of TV series, shows, galas, documentaries, cartoons, etc. of various themes and genres to meet the needs of people of different ages. There will also be many high-quality movies released during the Spring Festival holiday. 

Second, in terms of expanding online services, we encourage all localities to actively organize cloud theaters and live art broadcasts, encourage libraries, museums, theaters, and other public cultural venues to carry out online services, and encourage internet audio-and-video platforms to set up special channels or sections for the Spring Festival. We will also promote a variety of national fitness events and also advocate for fitness at home. Through these means, we should be able to meet the online and offline cultural and sports needs of the masses during the festival. 

Third, in terms of holiday travel, we encourage local governments to provide rich tourism products and holiday leisure activities such as rural tours and surrounding area tours dependent on actual conditions. Outdoor spaces such as parks and stadiums should be opened to better meet the needs of local tourism and leisure for those people who stay. At the same time, scenic spots should properly control the number of visitors, improve appointment management measures, and encourage tourists to travel in staggered groups. 

Fourth, there are also relevant requirements for epidemic prevention. We will supervise various public cultural venues to implement epidemic prevention and control requirements. Cinemas, theaters, and other entertainment venues in low-risk regions must open operate at less than 75 percent capacity. Measures for epidemic prevention such as health monitoring, disinfection of venues, and registering when entering public places must be effectively implemented to reduce the risks that may be posed by gatherings.

Relevant departments will resolutely follow the deployment of the Party Central Committee and the State Council and do their best to ensure services and supplies to people who stay put for the Spring Festival holiday. We will try to make people feel at home, no matter where they are, so that the 2021 Spring Festival will still provide a happy and wonderful new year experience.

That's all I'll say. Thank you.

Economic Daily:

Migrant workers who choose to stay for the Spring Festival holiday are likely to face some inconveniences in their work and life. How can we ensure that those people can celebrate the festival in the place where they work? 

Zhang Ying:

Thank you for your question. Workers staying behind for the festival will help reduce the chances of the virus spreading, but some difficulties and problems may arise. We need to provide essential supplies and thoughtful services to make their festival comfortable and happy. As required by the circular on ensuring services and supplies to people who stay for the Spring Festival holiday released by the General Office of the Central Committee of the Chinese Communist Party and the General Office of the State Council, we will implement the special action plan of "providing support and stabilizing employment during the Spring Festival" to guarantee the legal rights, such as correct salaries and leave, and interests of people who choose to stay put. The Ministry of Human Resources and Social Security will work with the Ministry of Industry and Information Technology, the Ministry of Civil Affairs, the Ministry of Transport, the State Council Leading Group Office of Poverty Alleviation and Development of China, the All-China Federation of Trade Unions, and the All-China Women's Federation to seriously implement the decisions and deployments of the Party Central Committee and the State Council, and further implement the special action plan. We will do this by rolling out four major measures to provide care for workers who stay put, companies who resume operation, and those rural migrant workers who return to work after the Spring Festival. The four measures include:

First, we will provide wholehearted support. We will work to ensure that people who stay where they work can still enjoy a festive atmosphere. We will offer guidance for local governments to organize various forms of group activities to celebrate the Spring Festival and offer assistance. We encourage companies to give bonuses for people staying on the job. By offering this support, we hope the workers can enjoy a happy new year. 

Second, we will enhance policy support so that people can keep their jobs. For those who choose to stay, there must be proper work and arrangements. We will encourage and guide companies to take into account the production needs and willingness of the workers to reasonably arrange work, stagger employees' leave or holiday for working extra shifts, and effectively protect the legal rights and interests of workers, such as their salary and leave. At the same time, we will further enforce policies such as refunding unemployment insurance premiums to help enterprises maintain stable employment and reduce layoffs. Policies will be implemented to help enterprises retain workers' posts and salaries.

Third, we will stabilize production and retain workers. We will strengthen labor dispatch mechanisms for key firms such as those engaged in the production of medical supplies and daily necessities. We will create temporary work such as anti-epidemic and disinfection tasks and community services as needed, to balance labor demand and supply. We will strive to ensure that those who want to work can contribute to the fight against the epidemic in the city where they reside. We urge companies to pay for workers according to the law if they work during the Spring Festival.

Fourth, we will provide excellent services to support people who stay put during the Spring Festival. We will provide "131" services to job seekers in need, namely: one session for career guidance, three pieces of suitable job information, and one training program recommendation. We will hold several job fairs across various sectors and types of work. Additionally, unemployment insurance benefits and temporary living allowances will be given in time to people eligible for unemployment benefits. Wholehearted services will be offered to better meet the needs of workers during the Spring Festival.

Recently, many places have rolled out a series of measures to encourage workers to stay put. For example, subsidies and consumption coupons will be offered to workers who stay where they work in regions such as Tianjin, Shanghai, Jiangsu and Zhejiang. Meanwhile, in Anhui, Guangdong and other regions, free admission to scenic spots will be offered and trips will be organized to enrich people's lives during the holiday. In Tianjin, Fujian, Guangxi and other places, the government will support and reward enterprises if they maintain full capacity, stabilize employment or recruit workers. In Hunan, Gansu and other major labor exporting provinces, Spring Festival gifts will be given to left-behind families to reduce migrant workers' worry about their loved ones at home.

We will summarize and promote the exact measures across various regions in time and implement the necessary action so that those people who stay put can enjoy a happy and healthy Spring Festival. Thank you.

Beijing Radio & Television Station:

Recently, many localities have issued circulars advocating people to stay where they are currently residing during the upcoming Spring Festival holiday, and introduced detailed rules on travelers from high-, medium- and low-risk areas. It is necessary to stay put for the holiday to help prevent and control the pandemic, but will local authorities adopt a blunt, one-size-fits-all approach? Thank you.

Zeng Yixin:

I'd like to answer first, and then I'll give the floor to Ms. Wang Bin to add more information.

As I just said, the current epidemic prevention and control situation remains severe and complicated. All residents in areas at high risk of COVID-19 shall stay where they currently reside to prevent the spread of the virus; in principle, people in medium-risk areas had better stay put, and for those who need to travel under special circumstances, they shall get the permission from the local epidemic prevention and control authorities; people in low-risk areas are advised to avoid traveling unless necessary. We have rolled out a range of targeted anti-virus measures for people from areas with different risk levels who really need to travel, so as to avoid a blunt, one-size-fits-all approach. We suggest local authorities should strengthen epidemic prevention and control with scientific and targeted measures, to guide people returning to their hometowns to cooperate in the implementation of local prevention and control policies. This is a macro-level requirement. Now, I will pass over to Ms. Wang to further answer your question. 

Wang Bin:

As Mr. Zeng just said, we suggest local authorities issue detailed rules to implement anti-virus policies according to local conditions. Zhejiang province is currently dividing rural areas into three areas defined by red, yellow, and blue colors, signifying the number and place of departure of rural returnees. The local government will apply necessary adjustments during the Spring Festival holiday. Guizhou province has encouraged and guided people returning to the countryside to cooperate in the implementation of local prevention and control policies, and increased government subsidies to reduce nucleic acid test fees. Rural returnees will only pay 30 yuan to receive a nucleic acid test, with the other 50 yuan being subsidized by local governments. This can effectively motivate people to cooperate in the implementation of local prevention and control policies.

As you can see, we suggest local authorities should strengthen epidemic prevention and control with scientific and targeted measures and not adopt a blunt, one-size-fits-all approach. We hope that local authorities could provide convenient, friendly, and warm services for the people, and ensure public health and safety during the holiday period. Thank you.

The Poster News APP: 

How to ensure the supply of important domestic goods during the Spring Festival? Thank you.

Zhu Xiaoliang:

Thank you for your question. The Spring Festival is China's traditional peak season for consumption as well as a crucial period to ensure market supply, provide the conditions for people to celebrate the festival, and get off to a good start in economic development. This year's situation is special. To better contain the epidemic and implement disease control and prevention measures, more people have chosen to stay where they work during the Spring Festival, bringing new features to the consumption amid the holiday. This will also set new requirements for maintaining market supply. Attaching great importance to this issue and resolutely implementing the decisions and arrangements of the CPC and the State Council, the MOC has carefully analyzed the market situation and taken targeted measures in a timely manner. We have provided a systematic guide for all regions to carry out various measures and do everything possible to ensure market supply amid the holiday while taking strict disease anti-epidemic measures. 

First, we have intensified the organization and delivery of goods for our people to have a carefree Spring Festival. According to the changing situations, we will work with relevant departments to release 20,000 to 30,000 tons of meat from central reserves every week to add to the market supply during the Spring Festival. We have arranged all regions to scientifically predict the needs of the people who stay where they work during the holiday and release the local reserves in accordance with the actual situation. We have guided and urged large circulation enterprises to adapt to the new changes of this year's consumption market during the Spring Festival to ensure the security of supply and demand as well as the production, sale of, and dispatching of goods. In light of recent key areas in epidemic prevention and supply maintenance, we have arranged key supply maintenance enterprises to ensure access to goods and stand ready for emergency transportation of them. We have guided and coordinated relevant areas to establish and improve joint maintenance and control mechanisms across nearby regions.

Second, we have taken measures to ensure transportation and procurement channels are unblocked so that people are able to shop comfortably. By cooperating with the relevant enterprises, we have unblocked both the main channels and the micro-circulation of domestic materials. We have also made sure that service networks, such as wholesale markets for key agricultural and sideline products, restaurants, hotels, and supermarkets, will stay open and extend their opening hours during the Spring Festival, and offline daily consumption will be made more convenient. E-commerce platforms and logistics enterprises are asked to not stop deliveries to meet reduced-contact consumption needs. 

Third, we have tracked and released market information so that our people can consume assuredly. We have conducted dynamic monitoring in 185 large-scale agricultural product wholesale markets regarding their business volumes and wholesale prices. We have launched 36 daily report mechanisms for market supply situations in large and medium-sized cities to monitor and deal with unusual situations such as market fluctuations. We have published supply and demand information through multiple channels to strengthen public opinion guidance, stabilize social expectations, and boost consumer confidence. 

Fourth, we have provided supplementary activities and services so that people can spend a heartwarming Spring Festival wherever they may be. We will hold a national online New Year's shopping festival, coordinated online and offline, to carry out various promotional activities full of festival air. All regions and enterprises are encouraged to provide warm activities such as gift bags and on-duty "red pockets" for people in difficulty, vulnerable groups, and people who stay where they work for the Spring Festival, in order to raise people's sense of gain and happiness in spending the holiday amid the epidemic. 

On the day before yesterday, the MOC issued a work notice, and tomorrow we will hold a national video conference to mobilize and arrange the next step in market supply maintenance. We hope that through our work the people will have a carefree, comfortable, and heartwarming Spring Festival. Thank you.

Xinhua News Agency:

After the proposal of staying put for the Spring Festival, more people will remain in cities, and transportation needs will increase. What measures will the relevant departments take to ensure safe and convenient transportation? Thank you.

Wang Yang:

Thank you for your question. More people will answer the call to stay put during the Spring Festival and remain in the cities, and the need for transportation will increase. To ensure safe and convenient travels, we will focus on the following aspects. 

First, we have taken regular epidemic prevention and control measures. In light of this Spring Festival's epidemic prevention and control situation and summarizing the past experience in regular epidemic prevention and control, the MOC has raised the standards in epidemic prevention and control and adopted a region-specific and multi-level approach. We have specifically made the Guidelines on a Region-specific and Multi-level Approach to Epidemic Control and Prevention in Transportation Stations and Vehicles. We have guided the passenger transportation enterprises in cities to strictly implement the requirements of epidemic prevention and control, and prevent epidemic transmission through urban transportation by taking measures of scientific organization and dispatch, increased capacity allocation, and the strict control of load rates. 

Second, we have reinforced transportation service security. We have guided local transportation departments to make full use of technological methods such as big data to strengthen scientific analysis of cities' transportation needs, and monitor passenger flow in real-time. City buses, rail transportation, and taxi enterprises have been ordered to reasonably adjust their transportation capacities and operation hours in a way that meets the travel demands for shopping, relaxation, and entertainment of those people who do not return to their hometowns during the Spring Festival. 

Third, we will meet the daily travel demands of the elderly. In order to make travelling easier for seniors, my ministry will implement the plan issued by the General Office of the State Council to help seniors overcome barriers to using smart technologies. We will strengthen traditional mobility services while also promoting smart services, and improve our measures in checking up passengers' health code in urban transport. We will also help major car-hailing platforms to optimize their "one-click car-hailing" function to provide convenience for seniors, and call on taxi drivers not to ignore elderly people trying to hail a taxi on the street when they have not booked a service in advance.

The Spring Festival is a time for celebrations. During the holiday, we will continue to prioritize workplace safety. Along with other related departments, we will organize safety inspections, eliminate safety hazards in time, and urge local authorities to perform their regulatory responsibilities and for businesses to fulfill their primary responsibilities in ensuring workplace safety. We will also improve safety awareness among drivers, ensure vehicles are kept in good condition, strengthen our dynamic monitoring of vehicles in motion, preserve order of stations in order to guarantee safety and order of urban transportation during the holiday.

China Central Television:

As people are advised to stay where they work during the Spring Festival holiday, will this impact the supply and prices of daily necessities as well as energy supply? While strictly continuing epidemic prevention and control measures, what steps will be taken to meet people's daily needs? Thank you.

Zhao Chenxin:

I will take this question. Thank you. I think it will have little effect on the supplies of daily necessities and energy. No matter where we are, our needs for basic necessities and energy remain the same. However, as people celebrate the Spring Festival in the places where they work, the regional demand structure will change accordingly. The NDRC has been working with other related departments in a series of online meetings to come up with various measures to ensure supplies and price stability during the Spring Festival holiday. We have also established many cross-departmental working groups to closely monitor the situation, develop an early warning system, ensure production and market supply, and put reserves into the market if needed. We will also focus our work on the following five aspects to ensure that people can celebrate the holiday with sufficient supplies.

First, we will make coordinated efforts to ensure production and supplies. We will help large and medium-sized cities coordinate vegetable production, especially the popular fast-growing leafy greens and sprouts during the Spring Festival, facilitate the shipment of pork and other meat products, and ensure smooth trans-regional logistics as well as sufficient supplies in the market. We will also guarantee the supply of coal, electricity, oil and gas.

Second, we will precisely adjust reserves. We have done a lot of work in this regard in recent years. We will help local authorities to adjust and enrich their reserves of major necessities, continue to release frozen pork from central reserves, organize major northern cities to release their winter and spring vegetables reserves, and put into market small packaged grains and cooking oil in a timely way depending on the situation. We will also coordinate the distribution and deployment of gas and electricity, and increase the coal reserves in major regions and among power plants.

Third, we will ensure unimpeded shipment and logistics. Mr. Wang Yang from the Ministry of Transport has talked about their work arrangements. I would like to add that while implementing epidemic prevention and control measures, we have been working with other departments to help local authorities adjust and improve transportation management, clear traffic blockages, encourage logistics and delivery companies to increase their manpower and shipment capacity, to guarantee the normal shipment of products purchased via e-commerce platforms, and ensure that people's normal life won't be affected.

Fourth, we will seek to guarantee normal marketing channels. We will guide agricultural product wholesale markets, farmers' markets, grocery stores, and e-commerce platforms that sell fresh products to better manage their supplies. Currently, these businesses are restocking before the holiday. Moreover, we also encourage community-based sales outlets to open for no less than eight hours every day during the Spring Festival holiday.

Fifth, we must guarantee people's basic livelihoods. We will urge local governments to continue the practice of increasing social security assistance and benefit payments in step with price increases, and in a timely way initiate and provide in full temporary price subsidies. We will work with market regulators to strengthen market inspections, punish behavior like hoarding, profiteering and price collusion, and safeguard market order and stability.

Through these measures, we believe that people's needs for daily necessities and energy will be guaranteed. I'm sure people will be able to celebrate the new year with no worries. Thank you.

Lianhe Zaobao:

China is encouraging residents to spend the Spring Festival holiday at their current residing localities to prevent spreading the epidemic. What impact will this measure have on the economy during the traditional Spring Festival holiday? What policies will the authorities adopt to encourage people to stay where they work and live to celebrate the Spring Festival whilst boosting consumption and the overall economy? Thank you.

Zhao Chenxin:

Thank you for your questions. We undertook an immediate analysis as soon as the circular was released, and we will also discuss the issue with local governments and relevant departments in the days to come. Regarding your questions, I would like to introduce some information based on our preliminary analysis. 

This is the first time ever for us to encourage people to celebrate an in-place Spring Festival, we have to keep monitoring and undertaking follow-up analysis into the relevant impact which, I think, could be multifaceted. For example, many are concerned about the impact the policy may have on various industries, such as tourism, transportation, as well as the accommodation and catering sectors. However, we believe it will also have some positive effects.  

First, staying in cities where people work and live can be definitely conducive to epidemic prevention and control, and that will promote sustained economic recovery. If many people decide to stay in place, it will significantly reduce large-scale personnel flow and gatherings. Moreover, people will save a lot of time that they spend on travel or in finding new jobs, which will benefit resumption of business activities and recovery of industries after the holiday.

Second, it can boost consumption in local areas. If a lot of people decide to stay where they work and live, those cities and towns with a relatively large population staying put will see an increase in consumption demand. 

Third, it can promote consumption for recreational activities. Local governments have stepped up efforts to provide convenient services for colorful cultural and recreational activities, as well as excursions. People who spend the holiday where they live and work will feel the warmth there, and at the same time, the consumption during the holiday can be promoted. 

Moreover, the circular also encourages local authorities to consider people's needs during the Spring Festival holiday, and provide various consumption items and social services featuring less contact and gathering. It is expected market vitality will be spurred, and more customized, intelligent, green and high-quality products will emerge during the holiday, which will further connect urban and rural areas, cover online and offline, and in-store consumption services, so as to better meet the public's diversified and personalized consumption demand during the holiday, and unleash the potential for new-type consumption, as well as generate new driving forces for consumption. 

The information I've mentioned above are somewhat based on preliminary analysis. Going forward, we will make a further study with relevant departments, and keep monitoring, studying and analyzing the economic performance and social consumption during the holiday, so as to offer targeted measures in a timely manner. We will ensure that everyone can have a relaxed and happy Spring Festival while working together with the public to promote steady and sound economic and social development, so that every individual can enjoy the fruits of development. Thank you.  

Southern Metropolis Daily:

People are encouraged to stay in cities where they work during the upcoming Spring Festival. However, in this way, some empty nesters and left-behind children probably cannot reunite with their family. For those elderly and children, are there any measures in place which will make the epidemic prevention and control both effective and more thoughtful? Thank you.

Guo Yuqiang:

Thank you for your concern for the elderly and children left behind. The CPC Central Committee and the State Council have always attached great importance to the care for the elderly, children and other special groups. In this regard, authorities have rolled out a set of measures to ensure the livelihood of those in need, as well as services and supplies for those who stay where they work during the holiday. All these measures have made clear that targeted support for the elderly and children left behind must be provided. 

In order to ensure that these disadvantaged groups have a safe, comfortable, and peaceful Spring Festival, civil affairs departments at all levels are operating under the unified command of the local Party committees and governments to take a series of measures and actions:

First, we will conduct thorough checks. Local authorities should carry out further checks on empty-nest elderly and left-behind children before the Spring Festival. Based on existing data, we will further investigate the family and migrant labor status within these two groups.

Second, we will strengthen the guidance work for providing assistance specifically designed to suit different groups. There are four aspects of the work that we have conducted. First, we have guided village (neighborhood) committees to increase regular visits to empty-nest elderly and left-behind children. Particularly, village (neighborhood) committee officials, directors and supervisors in charge of child-related works should take advantage of their experiences from front-line work and familiarity with their designated areas to find out residents' needs and provide necessary assistance. Second, we have implemented assistance and guarantee measures and provided various services which include daily care for elderly people with difficulties due to the epidemic. We have also required local authorities to optimize and simplify confirmation, review, and approval procedures for de facto unattended children, orphans, and other children in difficult situations during the epidemic prevention and control period. For those who meet these conditions, we have required that the related departments make an application, receive approval, and provide a living allowance within one month. Third, we have enhanced guidance relating to family guardianship. It is required that migrant workers have to assign a qualified caregiver to take care of their left-behind children. If it is difficult to assign someone due to practical difficulties, it should be reported to the village (neighborhood) committee. The village (neighborhood) committee should then assign qualified caregivers to the left-behind children and make sure that they are properly taken care of. Fourth, we encourage migrant workers to stay where they live and work during the holiday and encourage them to make regular phone calls and video calls to their elderly relatives and children left at home.

Third, we should conduct epidemic prevention and control work properly. We have provided instructions to local authorities to further involve empty-nest elderly and left-behind children in the unified deployment of local joint prevention and control mechanisms. Village (neighborhood) directors of child-related works should adopt suitable methods for left-behind children in order to strengthen their education on epidemic prevention and control. At the same time, under the local epidemic prevention and control requirements, directors should also provide psychological counseling services and conduct care activities.

Fourth, we should provide aid to and protection for children without guardianship due to emergencies. On Jan. 13, the Ministry of Civil Affairs, together with nine government departments, including the National Development and Reform Commission, the NHC, jointly issued documents, requiring that the village (neighborhood) committee or organizations for minor protection should be coordinated to take on temporary care duties and provide care services for those children whose parents and other guardians or entrusted caregivers cannot fully perform their responsibilities in raising and guarding them due to an emergency, such as treatment due to confirmed infection, need for centralized medical observation, or otherwise affected by the needs of epidemic prevention and control work. That's all. Thank you.

Global Times:

It was reported earlier that China plans to inoculate 50 million people against COVID-19 before the Spring Festival. so how many people have been inoculated so far? In addition, some outbreaks have revealed obvious loopholes in the epidemic prevention and control in rural areas. Have these loopholes been plugged? Thank you.

Zeng Yixin:

Thank you for your attention to the vaccination issue. Mass administration of safe and effective vaccines is the most economical and efficacious measure to prevent and control infectious diseases. Therefore, we are now conducting the inoculation program with certain priorities and in a steady and orderly manner, vaccinating key population groups at a higher risk of infection across the country. We have mainly focused on vaccinating the tens of millions of people working in key areas involving border ports and international and domestic transportation, as well as in key industries such as health care, social resources security and basic social operation services. In general, the relevant work is progressing in a smoothly and orderly way, so that the number of people vaccinated in various regions is increasing. As of Jan. 26, a total of 22.77 million doses of COVID-19 vaccine have been administered in China.

We have mainly done the following work: first, we have made meticulous and thorough arrangements concerning the vaccination task and provided relevant technical guidance to localities. These have, in a coordinated manner, set up vaccination organizations and teams, and carried out pre-vaccination professional training, while taking into account their needs regarding vaccination and epidemic prevention and control, as well as local medical and health resources. Second, the standardized management of inoculation has been strengthened. We have given full play to the role of the immunization information system and promoted IT applications in vaccine management so that every vaccine can be fully traced. Before vaccinating, the subjects must be asked whether they have contraindications so as to ensure standardized inoculation. Third, efforts have been made to monitor adverse reactions and conduct medical treatment. The monitoring of adverse reactions is very important and must be conducted in strict accordance with the regulations and fully reported to the relevant authorities. In addition, professional medical workers should be present at the vaccination sites to ensure medical treatment in a timely manner in case of any adverse reactions. This is my answer to the first question.

Now, I will talk about how to plug loopholes in epidemic prevention and control in rural areas. From the perspective of recent cluster cases, problems of weak awareness of epidemic prevention and control, insufficient anti-epidemic supplies and relatively poor technologies do exist in rural areas. Some localities have even witnessed super-spreading events caused by gatherings. In order to enhance pandemic prevention and control in rural areas, the NHC, along with relevant departments, has specially put forward anti-epidemic requirements for rural areas in the present winter and in the coming spring, and have made feasible work arrangements in line with actual rural conditions from the aspects of "early detection, reporting, quarantine and treatment and effective guarantee." Here, I'd like to stress in particular the following points:

First, prevention and control measures should be more precise and scientific. We put forward targeted requirements regarding the movement of people in areas at different risk levels. People in high-risk areas or those who have been to high-risk areas within the last 14 days should stay put during the Spring Festival travel rush. In principle, the same also applies to people in medium-risk areas or those who have been to medium-risk areas within the last 14 days. Key population groups in low-risk areas, including employees in the imported cold-chain food, having direct contact with imported goods at ports, and those working in isolation sites, are required to present a negative nucleic acid test result conducted within seven days of their planned date of return to their hometowns in rural areas in another province. The rest of people in low-risk areas need to possess a green healthy code for an orderly flow.

The second is to fulfill the responsibility of "four preventions" (preventing risks involving people, objects, the environment and unknown risks). Localities should activate epidemic emergency command systems, establish and improve their task forces, strictly implement the rules of epidemic "daily report" and "zero report", and make full preparations for nucleic acid testing, isolation, medical treatment, etc. I want to particularly underline that training in COVID-19-related knowledge of medical staff at the grassroots levels in rural areas, including rural doctors, should be intensified, so as to help them detect some suspicious symptoms in a timely manner, give correct suggestions and take some necessary measures during their daily reception of patients. In this way, we can ensure timely detection, reporting and handling of COVID-19 cases.

The third is to quickly initiate an emergency response. Once an epidemic occurs, the local joint prevention and control mechanism should immediately begin its emergency response, quickly carry out an epidemiological investigation, locate the source of infection as soon as possible, determine close contacts, implement local-regional control, administer nucleic acid tests to key personnel, provide medical treatment to patients, and implement other measures to control the spread of the epidemic as soon as possible.

No chances should be taken in such critical instances. All localities and units must refine and implement various work and emergency plans in accordance with the requirements of the joint prevention and control mechanism of the State Council and carry out emergency drills for epidemic prevention and control so as to ensure that all preparations for dealing with the epidemic can be put into place. Thank you.

Cover News: 

How can the transportation department strengthen the guarantee of receiving emergency materials and production and daily necessities? In addition, will express delivery of goods continue as normal during Spring Festival?

Wang Yang:

Thanks for your question. The Ministry of Transport will conscientiously implement the spirit of the two offices' circular, strengthen work deployment, supervise and guide local transport departments to do a good job in epidemic prevention and control, and ensure emergency transportation of production and daily necessities.

First, in accordance with the deployment and arrangement of the joint prevention and control mechanism of the State Council, our ministry together with relevant departments has accelerated the establishment of a special system for traffic control and transportation support. This special system will operate 24/7 and carry out coordination, scheduling, and support work.

Second, according to the requirements of the two offices, restrictions on freight traffic in low-risk areas should be completely abolished, as already required. At the same time, we have simplified the process for those who need to apply for an emergency transport vehicle pass. Now, the process requires the carrier and the driver to download, fill in, and print the pass according to the unified format and carry it in the vehicle. At the toll stations where conditions permit, emergency green passages are required to strengthen traffic guidance, and vehicles with emergency transportation permits are guaranteed to be given priority.

Third, improve the three-level coordination and dispatching mechanism of the ministryprovince and station, and strengthen the monitoring and analysis of road network operations. In case of congestion, dispatch shall be carried out in order to alleviate traffic. At the same time, we should also strengthen coordination with relevant departments and excel in the handling of road traffic emergencies in bad weather.

Fourth, strengthen transportation support of key emergency materials, strengthen coordination and communication, and guide the relevant provincial transportation departments through the entire process seamlessly to ensure the efficient and safe arrival of key emergency materials.

As for the "last kilometer" of logistics mentioned just now, we are very concerned about the issue of express delivery. As Spring Festival approaches, the postal administration departments and delivery enterprises have taken action to strictly prevent and control the epidemic situation, while at the same time have spared no effort to provide services for people who stay where they work during the Spring Festival holiday. China Post and related express companies have announced that they "will not be closed for Spring Festival," and will ensure that the network, transportation capacity, personnel, customer service, and other aspects are guaranteed. Therefore, I believe that if you choose to purchase New Year's goods online, they will be delivered to your home as scheduled. Thank you.

Shou Xiaoli:

Thank you to all of the speakers. Thanks to friends from the media. Today's SCIO press conference is hereby concluded. Goodbye.

Translated and edited by Zhu Bochen, Zhang Rui, Guo Yiming, Wang Yiming, Wang Zhiyong, Wang Mengru, Zhang Junmian, Liu Jianing, Liu Qiang, Zhang Liying, Yan Xiaoqing, Huang Shan, Xu Xiaoxuan, Li Huiru, Xiang Bin, Fan Junmei, Wang Qian, Yang Xi, Gong Yingchun, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC) 

Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date: 

Jan. 22, 2021

Shou Xiaoli:

Ladies and gentlemen, good afternoon and welcome to this press conference. Today, we are delighted to invite Mr. Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC), to brief you on the reform and development of China's banking and insurance sectors in 2020 and answer your questions. Alongside him is Mr. Xiao Yuanqi, chief risk officer and spokesperson of the CBIRC. Now, I would like to give the floor to Mr. Liang Tao.

Liang Tao:

Good afternoon, friends from the media. Thank you for your interest in and support for the work of the CBIRC. Let me first brief you on the reform and development of the banking and insurance sectors in 2020. 2020 was an extraordinary year. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the banking and insurance sectors have worked hard to overcome the impact of the epidemic, responded to various risks and challenges, and continued to maintain sound operations. New achievements have also been made in reform and development.

First, assets and liabilities increased steadily. At the end of 2020, banking institutions saw their total assets reach 319.7 trillion yuan, up 10.1% year on year. Meanwhile, their total liabilities were 293.1 trillion yuan, up 10.2% year on year. The total assets of insurance institutions reached 23.3 trillion yuan, up 13.3% year on year; primary insurance premium income was 4.5 trillion yuan, up 6.1% year on year; and the balance of insurance funds was 21.7 trillion yuan, up 17% year on year.

Second, the quality and efficiency of serving the real economy continued to improve. In 2020, RMB loans rose by 19.6 trillion yuan, an increase of 2.8 trillion yuan over the previous year. Loans to private enterprises and manufacturing increased by 5.7 trillion yuan and 2.2 trillion yuan, respectively. Inclusive loans received by small and micro firms, loans to firms engaged in scientific research and technology services, and loans to firms engaged in information technology services increased by 30.9%, 20.1% and 14.9%, respectively. New bond investment of banks and insurance institutions reached 9.5 trillion yuan. The insurance sector provided 8,710 trillion yuan worth of insurance, an increase of 34.6% year on year; and the sector made a combined compensation of 1.4 trillion yuan, up 7.9% year on year.

Third, key business and risk indicators were kept within an appropriate range. In 2020, China's banking sector disposed of 3.02 trillion yuan in non-performing assets. As of the end of 2020, the balance of non-performing loans (NPLs) was 3.5 trillion yuan, up by 281.6 billion yuan from the beginning of the year; the NPL ratio was 1.92%, a decrease of 0.06 percentage points from the beginning of the year; and the ratio of loans overdue more than 90 days to NPLs stood at 76%, down 5.1 percentage points from the beginning of the year. The overall liquidity of banks and insurance institutions remained stable. The liquidity coverage ratio of commercial banks was 146.5%, and the cash flow from operating activities of insurance companies increased by 106.5% year on year.

Fourth, the ability to defuse risks has been strengthened through multiple channels. In 2020, 1.34 trillion yuan of commercial bank capital was supplemented through the issuance of preferred stock, perpetual bonds and tier 2 capital bonds. The banking sector set aside 1.9 trillion yuan in loan loss provision, an increase of 113.9 billion yuan year on year. At the end of 2020, the provision coverage ratio (PCR) stood at 182.3%, and the loan loss provision coverage ratio was 3.5%, both maintaining relatively high levels. According to preliminary statistics, commercial banks achieved a net profit of 2 trillion yuan, a decrease of 1.8% year on year. At the end of 2020, the capital adequacy ratio of commercial banks reached 14.7%. At present, the comprehensive solvency adequacy ratio of insurance companies stands at 242.5%, and the core solvency adequacy ratio at 230.5%.

Fifth, positive progress has been made in the reform and opening-up of the banking and insurance sector. We have been working continuously to facilitate and improve corporate governance of banking and insurance institutions, better incorporating CPC leadership into corporate governance, strictly regulating equity management, and strengthening supervision efforts and performance duties amongst directors, supervisors, and senior management. We have issued a working plan on the further reform and supplementing capital for small- and medium-sized banks and comprehensively promoted the reform and risk-resolving efforts amongst commercial banks in cities and credit cooperatives in rural areas. We have also promoted the reform of insurance mechanisms, publishing guidelines for the overall reform of auto insurance, studied the facilitation of China's third pillar pension insurance system and accelerated reforms in accident and agricultural insurance. We have also steadily expanded the opening-up of the financial sector, working to implement policies that promote opening-up and proactively review applications for market access by foreign-funded institutions. Since 2018, applications from foreign banks and insurance companies have been approved to allow them to establish nearly 100 various institutions in China.

The CBIRC will hold a meeting next week on the national supervisory works and make comprehensive plans for 2021. We will resolutely adhere to the centralized and unified leadership of the CPC Central Committee with regards to the financial sector based on China's new development stage and new development philosophy, and contribute to building a new development pattern. We will work to ensure stability on the six fronts and maintain security in the six areas, deepening supply-side structural reform in the financial sector and promote higher-level opening-up. We will also continue to prevent and resolve financial risks, further improve the quality and efficiency of the financial sector's ability to serve the real economy, and continue to make breakthroughs in the regulatory work of the banking and insurance sector. Thank you.

Shou Xiaoli:

Thank you, Mr. Liang. Now the floor is open to questions. Please identify your news outlet before asking questions.

Yicai:

Facing the severe and complicated economic situation both in China and abroad in 2020, especially due to the impact of COVID-19, what's the situation like regarding risk in the banking and insurance sectors? Also, how high are the credit risks in the banking industry? Have these risks been assessed? Regarding recent risk-related incidents in banks and insurance institutions, how are these issues being resolved? Thank you.

Liang Tao:

Mr. Xiao will answer your questions.

Xiao Yuanqi:

Thank you for your question. As you mentioned, 2020 was truly an eventful year and banks and insurance institutions were indeed affected. However, the current situation is much better than what we estimated at the beginning of the year and the risks of banking and insurance have generally been kept under control. Mr. Liang has already briefed on some of the operating and regulatory indicators of the banking and insurance sectors in 2020, here I will not repeat them. I believe that the reasons for the current situation lie in the following aspects.

First, our work is always to ensure the banking and insurance sectors serve and support the real economy. It is precisely because we have increased support in this regard that the risks faced by banking and insurance institutions are controllable. When the real economy grows well, these institutions will naturally encounter fewer risks; otherwise, their risks will increase. We adopted some special policies at the beginning of this year, especially those helping small and micro-enterprises and private enterprises to overcome difficulties, such as postponing principal and interest repayments on loans and flexibly adjusting regulatory measures. These policies provide enough time and space for the banking and insurance institutions, through their own operations and management, to better serve and promote the development of the real economy. Last year, China's GDP grew by 2.3%, exceeding expectation. China is the only major economy in the world registering positive economic growth in 2020.

Second, we have focused on and adopted many measures to prevent and deal with risks involved in existing non-performing assets. For example, we have disposed of 3.02 trillion yuan in non-performing assets through liquidating, write-off and transferring, etc., with the efforts and amount involved both being unprecedented. We have conducted stricter screening of high-risk institutions and tackled relevant risks. The high risks confronting some small and medium-sized financial institutions, like Baoshang Bank, the Bank of Jinzhou, Hengfeng Bank and some trust companies and insurance institutions, have been effectively defused, easing their burdens. 

Third, we have taken proactive measures to prevent risks. Arrangements have been made in advance to avoid risks of key areas.

In the real estate sector, we have established a comprehensive and unified statistical system for real estate financing. Earlier, the CBIRC and the People's Bank of China issued a notice on the concentration management of real estate financing. If the real estate risk exposure of banking institutions exceeds a certain proportion of the net capital, relevant measures must be taken. At the same time, we have been closely following the changes in housing prices in different regions and cities, and cooperated with other departments and local governments to take appropriate measures based on local conditions. These measures are dynamic and can be adjusted at any time according to local conditions.

We have remained vigilant about shadow banking. Last year, China released its first report on this issue, which you might have covered. We have always stayed alert in regard to shadow banking. Since early 2017, we have made great efforts to improve regulation over the shadow banking sector and achieved great results. Since 2017, the scale of high-risk shadow banking business has shrunk by 20 trillion yuan and this achievement must be consolidated continuously. There was no let-up in our efforts last year as well, so as to firmly prevent high-risk shadow banking business from rebounding .

We intensified banking and insurance institutions' ability to withstand risks. Last year, we took multiple measures to require the banking sector to replenish capital through different markets and various channels, such as bringing in strategic investors, leveraging tier-2 capital tools, and issuing perpetual bonds. In addition, we encouraged local governments to issue special bonds to replenish the capital of small- and medium-sized banks, especially local banks. Currently, this work is underway and has achieved great progress in helping banks to increase capital. By increasing provisions, we strengthen our ability to fend off risks. When disposing of NPLs, we reduced some of our provisions and increased our withdrawal of provisions at the same time to better fend off risks.

These measures took effect across multiple channels and thanks to this multi-pronged approach, risks in banks and insurance institutions are manageable on the whole, no matter whether they're individual, regional, or systematic risks. Just like Mr. Liang said before, operations in the banking and insurance sector are stable and indicators drawn from either institutional performance or risk regulations have remained within an appropriate range. Thanks.

CCTV:

I'd like to ask a question about corporate governance. Last year, CBIRC disclosed lists of non-compliant shareholders and intensified supervision work for corporate governance over the last two years. After the disclosure of lists, has there been any follow-up? What measures were taken last year and what new measures will be taken for this year's work? Thank you. 

Liang Tao:

Thank you for your questions, I will answer them. Just like you said, CBIRC attaches great importance to the supervision work and governance reform of banking and insurance institutions and sees the enhancement of corporate governance as a means to improve banking and insurance institutions' abilities to withstand risks and achieve high-quality development. Our work mainly relates to four aspects as follows:

First, we enhanced the top-level design. Last year, we released the Three Year Action Plan for Improving Corporate Governance of Banking and Insurance Sectors (2020-2022), which outlines the roadmap and timetable for supervision work and reform for corporate governance in the banking and insurance sectors over the next three years.

Second, we strengthened points of weakness in the system. We stepped up the building of the corporate governance regulation system and set up rules for companies in the banking and insurance sectors to obey. These were targeted at addressing major issues such as behaviors of large shareholders, connected transactions, deductions from salary, evaluation of the performance of corporate directors and supervisors, and poor records on equity management. For key issues, we are ready to formulate special regulatory regulations.

Third, we carried out regulation and assessment. We have completed our assessment on corporate governance of all commercial banks and insurance institutions for the first time. We evaluated the governance of 1,792 institutions. Generally speaking, most institutions were rated B (good) and C (regular). The number of companies rated B and C stands at 1,400, accounting for 78.12% of the total. A total of 209 institutions were rated D (bad) and 182 institutions were rated E (very bad), accounting for 11.66% and 10.16%, respectively. Through the evaluation, regulators were able to grasp a comprehensive understanding of the corporate governance system in banking and insurance sectors in a timely manner. By conducting rectification and supervision work based on these assessments, regulators will push companies in the banking and insurance sectors to enhance the quality and efficiency of corporate governance.

Fourth, we conducted specific rectifications. Focusing on small and medium-sized institutions, we sternly dealt with activities that violated laws and rules, such as fraudulent capital, share-holding entrustment, shareholders' direct interference in company operations, and benefits transfer through improperly connected transactions. We inspected 4,600 legal entities, handled over 3,000 equity violations, and in two batches, disclosed to the public a list of shareholders of 47 banks and insurance institutions who severely violated laws and rules and led to serious social impacts. We also appropriately cracked down on equities of illegal shareholders in high-risk institutions and removed them in an orderly way.

In general, through the continuous efforts made by the financial regulators and the industry over the past year, China's banks and insurance institutions have achieved positive outcomes in corporate governance and reform. However, several existing problems should be brought to the forefront. First, the Party building in some state-owned institutions has become weakened and they failed to realize the integration of the Party's leadership with corporate governance. Second, some institutions were found to have prominent problems, including a lack of transparency in ownership structures, share-holding entrustment, prevalence of dormant shareholders, and shareholders overstepping their bounds with misconducts. Some big shareholders directly interfered with an institution's operations and pulled strings to control the board of directors and top executives to realize benefit transfer through illegal connected transactions thus misappropriating the institution's interest at will. Third, the boards of directors in some institutions operated irregularly; some non-executive directors could not, dared not, or were unwilling to perform their duties, and the independence and professionalism of some directors could not be guaranteed at all. Fourth, information disclosure was not standardized, and the rights and interests of stakeholders, including financial consumers, could not be adequately protected. 

In 2021, the CBIRC will thoroughly implement the spirit of the Central Economic Work Conference, continuously promote banks and insurance institutions to enhance their corporate governance, uphold and strengthen the Party's overall leadership relating to financial work, promote the integration of the Party's leadership with corporate governance in state-owned banks and insurance institutions, improve with speed the supervision system in corporate governance, and step up efforts to issue regulatory rules on corporate governance, big shareholder conduct, connected transactions, remuneration deductions, and director and supervisor performance evaluations. We will also improve commercial bank equity custody mechanisms, step up medium- and long-term classified punishment system for shareholders, take measures like "blacklisting," restricting stockholders' rights, and exposing and cracking down on illegal stockholders. We will carry out corporate governance supervision assessments, strengthen classified supervision, and intensify market discipline. In addition, we will also improve the corporate governance regulatory information system to enhance the informatization level of our supervision. Thank you.

China Daily:

The market shows that after the government and regulators took anti-monopoly measures on internet platform enterprises, banks became reluctant to lend and even suspended loans to private enterprises in internet-related fields. Is this true? What's the comment from the regulatory agencies? Thank you. 

Liang Tao: 

Let me answer this question. The private economy is an indispensable power in the promotion of economic development in China. Private enterprises are important components of the economy. The financial regulator has always supported the development of the private economy, treated the private economy as a key issue, guided financial institutions to offer all-round financial services to private enterprises, and could be credited with having achieved great accomplishments. 

Recently, the financial governance department arranged talks with several internet platform companies such as the Ant Group, acknowledging their financial technological innovations, efficient financial services, and inclusiveness. However, they also pointed out their problems such as arbitrage through irregular governance, monopolizing, and impairing customers' interest. According to the basic requirements for strengthening anti-monopoly regulations and preventing capital from growing in a disorderly manner, the financial governance department has taken a series of regulatory measures, clearing up and rectifying the situation. These measures are not only in accordance with the law of market economy development such as upholding anti-monopoly and anti-illegitimate competition as well as the requirements of the rule of law, but also meet the fundamental interests of our people and all market entities. They also help private companies to sustain long-term, steady, and healthy development. Of course, those measures have not been taken to target private companies or a specific company, and will not affect the normal business development of relevant companies. As for the question you asked just now regarding whether some banks stinted or altogether stopped providing loans to private enterprises in some sectors, we indeed found several cases where this was the case via our investigation. We consider that this behavior is not consistent with the "two unwaveringly" requirements, and should be rectified. The CBIRC will encourage banks and insurance institutions to cooperate with internet platform companies, including those in question, according to laws and regulations. Policies for financial support remain unchanged and will not be reduced.

We noticed that some internet platform enterprises have been quick to rectify their behaviors after being questioned. According to preliminary results, we believe that through regulation and rectification, these internet platform enterprises will stick to the goal of serving the real economy and the people, and uphold fair play in the market. They must innovate while also keeping to the right path under the principle of serving the real economy, adhering to prudential supervision so as to become an important force in supporting the national economy and promoting domestic and international circulations. Thank you.

ThePaper.cn:

Recently, some online mutual-help platforms have developed rapidly but have the characteristics of commercial insurance companies by nature. However, there are currently no clear regulatory bodies or standards, leaving them unsupervised. The internet company Meituan recently announced the closure of its internet mutual-help platform. How will the supervision administration supervise internet mutual-help platforms and better regulate the insurance market? Thank you.

Xiao Yuanqi:

Thank you for your question. Meituan's mutual-help platform indeed announced at 5 o'clock on Jan. 15 that they would officially stop its service on Jan. 31. A few days ago, Baidu also stopped its internet mutual-help platform, which gave rise to great concerns. The main reason for Meituan to close its mutual-help platform is that they had deviated from their main business and adverse selection risks had been mounting in the company. Next, we will further focus on the mutual-help services of internet companies, learn their operational methods and risks, and take corresponding measures accordingly. Thank you. 

CNR:

We all know that the reform of small and medium banks is important in the supply-side structure reform of the Chinese financial sector. Currently, common problems found in small and medium banks relate to the lack of core competitiveness, relatively high risks, and inadequate capital. What has the CBIRC done to tackle these issues since last year? 

Xiao Yuanqi:

In fact, during his answers to related questions and report just now, Mr. Liang has given you a relatively comprehensive introduction to the reform of small and medium-sized banks and other reforms. Let me just add a few points.

Last year, we took the reform of small and medium-sized banks as an important task and achieved several results. First, the structure of the entire banking system has been further optimized, leading to the establishment of a system with entities of different scales and different characteristics, each of which can support and complement one another. The system includes some very large banks, such as the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and Bank of Communications. These four banks are all globally important banks, ranking among the top in the world in terms of scale and business diversity. There are also medium-sized banks, and some very small regional banks, even community and village banks. In short, by optimizing the banking system's structure and creating a diversified and distinctive banking system with wide coverage, the system can now provide the real economy and broad consumers with convenient, cost-controllable and comprehensive financial services.

Second, we further clarified the development direction of small and medium-sized banks. Small and medium-sized banks and regional banks must take several steps. The first is to develop locally. They cannot do business all around the country, and in principle, should only develop locally. The second is to focus on small and micro enterprises, the three rural subjects of "agriculture, rural areas and farmers," and personal financial services in order to meet the financial needs of local enterprises and residents. The third is to conduct inclusive finance, especially filling in for some weak links and fields. This is where the advantages of small and medium-sized banks lie, and it is also the mission they should undertake. Small and medium-sized banks must be able to resist the temptation to blindly grow bigger, should take root in the local areas, and should focus on being small, detail-oriented and solid.

Third, we have done a lot of work in corporate governance. Mr. Liang has already introduced this work, so I won't repeat it.

Fourth, we have further clarified the responsibilities of small and medium-sized banks in strengthening CPC leadership, operation management and supervision. The operation of banks is the responsibility of each bank's managers. In particular, the board of directors bears the ultimate responsibility, and shareholders must perform their responsibilities. Local Party committees and governments should bear the leadership responsibility of the Party, while also having the responsibility to maintain local financial stability. The regulatory department is responsible for regulations.

Fifth, we have made great efforts to replenish the capital of small and medium-sized banks and consolidate their capital strength. Thank you.

China News Service:

In recent years, the CBIRC has introduced a series of measures to support the development of the private economy. The scale of bank loans to private enterprises also continues to rise. However, during interviews, we found that some private enterprises have encountered difficulties regarding bank financing. I would like to ask why this happens? And going forward, how will the CBIRC continue to support the development of private enterprises? Thank you.

Liang Tao:

By the end of 2020, the balance of loans to private enterprises went up 14% year-on-year to 50 trillion yuan; the balance of inclusive loans to small and micro business was 15.3 trillion yuan with a growth rate that is 18.1 percentage points higher than that of all loans. However, as you say, private enterprises, especially small and micro business, still face financing difficulties in the market. 

Private enterprises involve a huge group covering all sectors of the national economy. They include both large and medium-sized enterprises and small and micro businesses. For large and medium-sized private enterprises, some have financing difficulties due to unsound corporate governance and unclear property rights, some due to deviation from their main business lines in unilateral pursuit of group and diversified operation, and some due to an unreasonable financing structure without giving overall consideration to the capital source and cost deadline, where a slight careless step in operation or market fluctuation will lead to tensions in the funding chain. Financing for small and micro businesses with high risks is a worldwide problem that requires the efforts of the whole society to deal with.

The CBIRC will further improve related institutions and measures, focusing on promoting policy implementation. There are already many policies in place and the key is to implement them in a targeted way to support the sound development of private enterprises. They can be classified as follows: First, for private enterprises with clear main business lines, financial soundness as well as a good credit rating of their major shareholders and actual controllers, banking agencies are required to keep checking their primary sources of repayments, reduce heavy reliance on mortgage guarantees and increase credit loans. Second, for private hi-tech enterprises engaged in advanced manufacturing, strategic industries as well as in building independent and controllable industrial and supply chains, banking and insurance agencies are encouraged to significantly increase medium-and-long-term financial support, develop science and technology insurance, continue to improve financial services favorable for innovation, support breakthroughs, fundamental research and application of core and key technologies, and give backing to innovative pledge financing products of intangible assets. Third, for private enterprises that conduct business in accordance with laws and regulations and have the ability for technological innovation, including private Internet-based enterprises, banking and insurance agencies will be supported to continue cooperation with them according to laws and regulations and provide quality financial services to better support the real economy. Fourth, for private small and micro businesses with good market prospects, strong ability to provide employment, and up to the standards of inclusive loans to small and micro businesses, we will continue with the policy of allowing them to postpone principal and interest repayments as well as the credit loan support plan, and guide banking agencies to expand lending for first-time loan renewals, credit loans, and medium-and-long-term loans so as to keep financing costs at a reasonable level. Fifth, for private enterprises facing temporary difficulties, banking and insurance agencies will be guided to adopt specific support measures in accordance with market rules and rule of law and focus on defusing liquidity risks for enterprises. For private enterprises which go in line with the direction of optimization and upgrading of the economic structure and display competitiveness but are facing difficulties temporarily, banking and financial agencies will be encouraged to establish a creditors' committee to strengthen coordination, avoid indiscriminately stopping, withholding or withdrawing loans, and provide necessary financing support so as to help such enterprises maintain and resume normal operation. Sixth, for private enterprises at risk, they are required to seek sound development in the process of solving problems and save themselves by divestment of non-main business assets and focusing on easing risks. Meanwhile, they can turn to local government for help. Banking and insurance agencies will be encouraged, on an equal and voluntary basis, to help enterprises improve their debt structure and corporate governance through a combined use of multiple means such as capital increase to expand stockholding, financial restructuring, merger and reorganization as well as market-based debt-to-equity swaps.

If the economy can be viewed as a body, finance would be the blood; they co-exist and prosper together. In the face of a complex and volatile international and domestic economic situation, China's financial institutions will adhere to the original mission of providing services to the real economy, and promote the construction of a community with a shared future for banks and enterprises, so as to achieve common development and prosperity with private enterprises. Thank you.

Jiemian:

Among the data just mentioned, I found that although the profits of commercial banks declined, the expansion velocity of the total assets of banking financial institutions grew even faster than the previous year. How do you view this? What is the expected change for the profits of commercial banks as well as the non-performing loan ratio of banking financial institutions in 2021? Thank you.

Xiao Yuanqi:

You have asked a very good question. It seems that you have run the numbers through. It is true that, last year, the assets size, especially the scale of loans by banks showed a considerable increase. As Mr. Liang said, last year, the loans had increased by more than 19 trillion yuan, but profits declined. The reasons include the following aspects: first, we asked the banks to return profits to enterprises, especially those small and micro businesses, and we have already achieved the target of returning profits valued 1.5 trillion yuan, which is no small figure. Second, we strictly investigated and dealt with illegal charges. Last year, we basically eliminated all the unreasonable charges existing in previous years; thus, the income related to bank charges declined. Third, after the marketization reform of the interest rate system, the interest margin of the banks shrank continuously. Currently, the interest margin of banks is about 2% on average; for a long time, it had been around 3%. While the interest rate of loans has declined constantly, that of deposits has not changed, or has even increased. The narrowing of interest margin was due to a rise in the overall cost of debt in regard to deposits. Recently, the yield rate of financial products we can buy from the banks reached 3% to 4%. There was a time when the interest rate of structural deposits also reached 3%-4%, and the interest rate of some banks was even higher. The interest rate of certificates of deposit was also around 3%. Therefore, the cost of debt increased. A combination of all these factors led to a rise in the size of assets and a decline in profits for banks. We believe that this is a very normal phenomenon. Generally speaking, the profitability of our banks is relatively healthy, and the rate of capital return and return on assets of our banks are also above the average level in the world. Therefore, there is still enough resources to supplement capital.

Your second question is regarding NPLs. Looking at the numbers, the NPL ratio dropped by 0.06 percentage points last year. There are many reasons for this. First, we have required banks to strengthen risk management and three aspects of loan checks, namely, pre-loan investigation, in-loan review and post-loan inspection. Banks must strictly guard against risks. Second, banks should increase their efforts in disposing of NPLs. A total of 3.02 trillion yuan of non-performing assets were disposed of last year, which was an unprecedented amount. Third, last year's economic growth exceeded expectations. China's economy grew by 2.3%, which created a good foundation for preventing a substantial rebound of banks' NPLs. However, supervision should focus on this issue from a prudential perspective. We should also be aware that the future situation of banks' NPLs is still relatively serious. It is possible that potential NPLs could increase, but we have conducted stress tests and made contingency plans accordingly. Thank you.

21st Century Business Herald:

As Mr. Xiao mentioned, there are certain requirements regarding real estate loan concentration, which took effect on Jan. 1 this year. Do these requirements apply to existing loans and how much impact this would have on personal mortgage loans. Secondly, how is the reform work going in terms of the four major financial asset management companies and provincial rural credit unions? Thank you.

Xiao Yuanqi:

As I mentioned, a while ago, the CBIRC and the People's Bank of China jointly issued a notice on real estate loan concentration requirements for Chinese banks. We are not only supervising the bank's concentration ratio in the real estate industry, but also in businesses in all industries. There have long been concentration ratio regulations for industries, single enterprises and single groups. This concentration ratio is linked to the risk asset exposure and net capital. For example, we used to require that the concentration ratio for a single enterprise should not exceed 10% of the capital, the concentration ratio for a group should not exceed 15%, and that of an industry should not exceed 25%. Therefore, the real estate industry is no exception. The real estate industry has its own concentration ratio, and it should follow the unified requirements for concentration ratio supervision. Each real estate enterprise should also follow the unified requirements for concentration monitoring. In fact, the notice on real estate is not new, and there has been management of loan concentration in the past. So, in the future, we will act in accordance with the existing management regulations and the requirements of this notice, and continue to closely monitor financing from the banking industry to the real estate sector, in order to ensure that real estate fundraising is stable and orderly. This will have little effect on mortgage loans. Mortgage loans are highly fragmented in terms of both scale and scope. So the concentration requirements won't effect it much.

As for the reform of small and medium-sized banks, I've already given some explanations. The reform of asset management companies has been underway. All reforms must relate to each sector's main business. The main business for asset management companies is to dispose of and manage non-performing assets (NPAs) as well as put these assets to good use. All asset management companies must focus on these tasks. Other kinds of businesses must also serve this purpose, otherwise, they should be stopped. Asset management companies also need to improve their corporate governance, innovate their methods and tools, and create new markets. The direction of their reform and development remains unchanged. Thank you.

WWW.CQCB.COM:

My question is also about the bad debt reported by banks. Statistics show that as of the end of 2020, NPLs reported by commercial banks reached 3.5 trillion yuan. Industry insiders said the pressure to dispose of NPLs will continue this year. How will such pressure be relieved? Thank you.

Xiao Yuanqi:

The increase of NPLs is dictated by law. As the total amount of assets increases, a corresponding proportion of new NPLs emerge. As I said just now, the NPL ratio dropped slightly last year, but the banking sector still faces pressure to dispose of NPLs.

First, there are some requirements for the disposal process. For example, procedures are different for the transfer of single corporate loans and the bundle transfer of personal NPLs. Also, loans can't be classified as NPAs before the court issues a ruling that is what they in fact are. These are not obstacles to the disposal of NPAs, though they will extend the time required to dispose of them.

Second, profits have declined, and for some banks, the pressure to make provisions will increase a little and they will be less capable of writing off NPLs using provisions. For the banking sector as a whole, provisions are increasing and capacity is rising. However, the structure is somewhat imbalanced and so the profits of some banks have declined relatively fast and they therefore have less resources to draw from for provisions.

Third, we should take a forward-looking approach and estimate potential risks in the increase of NPAs. This doesn't mean that the NPAs reported by banks are bound to increase, however, we need to estimate the risks because banks should be prudent in their operations and think more about possible difficulties that could arise in the future. In the case of NPL increase, banks need to take precautions now and make suitable response plans. For example, they need to introduce precautionary measures to increase necessary resources and they should not sit idle waiting for the risks to occur. Thank you.

Shou Xiaoli:

Thank you, Mr. Liang and Mr. Xiao. Thanks to friends from the media. Today's SCIO press conference is hereby concluded. Goodbye.

Translated and edited by Wang Yiming, Zhang Liying, Zhu Bochen, Li Huiru, Mi Xingang, Zhang Junmian, Liu Jianing, Zhang Rui, Liu Qiang, Lin Liyao, Fan Junmei, Yan Xiaoqing, Guo Yiming, He Shan, Cui Can, Wang Qian, Yuan Fang, Duan Yaying, Yang Xi, Xu Xiaoxuan, David Ball, Geoffrey Murray, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speaker:

Ning Jizhe, head of the National Bureau of Statistics

Chairperson:

Hu Kaihong, spokesperson for the State Council Information Office of China

Date:

Jan. 18, 2021

Hu Kaihong:

Ladies and gentlemen, good morning and welcome to this press conference. 2020 was an extraordinary year in which China's economic performance attracted wide attention at home and abroad. Today, we are delighted to invite Mr. Ning Jizhe, head of the National Bureau of Statistics (NBS), to introduce China's economic performance in 2020, and answer your questions.

Now, I would like to give the floor to Mr. Ning.

Ning Jizhe:

Friends from the media, good morning. Let me start by introducing China's economic performance in 2020. China's economy recovered steadily during the year, with major economic indicators surpassing expectations. In 2020, faced with a grave and complex situation both at home and abroad, and the huge impact of the epidemic in particular, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, all regions and departments adhered to the general working guideline of making progress while maintaining stability, coordinated epidemic prevention and control work with socio-economic development, and took solid steps to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and security in the six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations). As a result, the national economy recovered steadily, employment and living standards were ensured, and the main goals and tasks of socio-economic development were accomplished better than expected.

According to preliminary estimates, China's gross domestic product (GDP) was 101.6 trillion yuan in 2020, an increase of 2.3% over the previous year at comparable prices. In the first quarter, China's GDP fell by 6.8% year on year, while the remaining three quarters saw growth rates of 3.2%, 4.9% and 6.5%, respectively. The value-added of primary, secondary and tertiary industries were 7.78 trillion yuan, 38.43 trillion yuan, and 55.4 trillion yuan, respectively, with growth rates of 3%, 2.6%, and 2.1%.

First, grain output reached a record high and the production of hogs saw sustained and rapid recovery.

Last year's total grain output was 669.49 million tons, up 0.9% compared with the previous year, increasing by 5.65 million tons. Of this total, the output of summer grain was 142.86 million tons, up by 0.9%, and that of early rice was 27.29 million tons, up by 3.9%. The output of fall grain reached 499.34 million tons, up by 0.7%. By species, the output of rice was 211.86 million tons, up by 1.1%; wheat was 134.25 million tons, up by 0.5%; corn was 260.67 million tons, declining slightly compared with the previous year; and soybeans was 19.6 million tons, up by 8.3%.

The total output of pork, beef, mutton and poultry in 2020 was 76.39 million tons, down by 0.1% year on year. Of this, the output of beef was 6.72 million tons, up by 0.8%; mutton was 4.92 million tons, up by 1%; poultry was 23.61 million tons, up by 5.5%; eggs was 34.68 million tons, up by 4.8%; milk was 34.4 million tons, up by 7.5%; and pork was 41.13 million tons, down by 3.3%. At the end of 2020, the number of hogs and breeding sows in stock grew by 31% and 35.1%, respectively, over that at the end of 2019.

Second, industrial production continued to increase, and high-tech manufacturing and equipment manufacturing enjoyed faster growth.

The total value-added of industrial enterprises above designated size increased by 2.8% year on year. In terms of ownership, the value-added of state-holding enterprises grew by 2.2%, that of shareholding enterprises was up by 3%; enterprises funded by foreign investors and investors from Hong Kong, Macao and Taiwan was up by 2.4%; and private enterprises were up by 3.7%.

In terms of sectors, the value-added of the mining sector increased 0.5%, manufacturing grew by 3.4%, and that of producing and supplying electricity, thermal power, gas and water grew by 2%. The value-added of high-tech manufacturing and equipment manufacturing increased by 7.1% and 6.6%, respectively, over the previous year, or 4.3 percentage points and 3.8 percentage points, faster than that of industrial enterprises above designated size. Specifically, the production of industrial robots, new energy vehicles, integrated circuits and microcomputer equipment grew by 19.1%, 17.3%, 16.2% and 12.7% year on year, respectively.

In the fourth quarter, the total value-added of industrial enterprises above designated size grew by 7.1% year on year, which was 1.3 percentage points higher than that in the third quarter. In December, the total value-added of industrial enterprises above designated size grew by 7.3% year on year, up 0.3 percentage points compared with November, and an increase of 1.1% month on month. In 2020, the national industrial capacity utilization rate reached 74.5%. In the fourth quarter, the rate reached 78%, which was 1.3 percentage points higher than that in the third quarter.

In the first 11 months of 2020, the profits of industrial enterprises above designated size reached 5.74 trillion yuan, up by 2.4% year on year, 1.7 percentage points higher than that in the first 10 months. Specifically, the total profits made by industrial enterprises above designated size in November increased by 15.5% year on year, maintaining double-digit growth for six consecutive months.

Third, the service sector recovered gradually, with the modern service sector gaining momentum.

In 2020, the Index of Services Production remained the same as that of the previous year. The value-added of information transmission, software and information technology services as well as financial services grew by 16.9% and 7% year on year, respectively, or 14.8 percentage points and 4.9 percentage points higher than that of the tertiary industry.

In the fourth quarter, the Index of Services Production grew by 7.7% year on year, up 3.4 percentage points compared with the third quarter. In December, the index also rose by 7.7% year on year. In the first 11 months, the revenue of service enterprises above designated size grew by 1.6% year on year. Specifically, the revenue of information transmission, software and information technology services and that of scientific research and technology services grew by 13.5% and 9.9%, respectively, 11.9 percentage points and 8.3 percentage points higher than that of service enterprises above designated size.

In December, the Business Activity Index for services was 54.8%, staying above the expansion range. Specifically, the index for sectors including air transportation, telecommunications, broadcast, television and satellite transmission services, monetary and financial services and capital market services continued to stay within the high expansion range at 60% and above. From the perspective of market expectations, the Business Activity Expectation Index for services was 60.1%, staying within the high expansion range for six consecutive months.

Fourth, market sales recovered quickly, and the growth in the sales of upgraded consumer goods accelerated.

In 2020, the total retail sales of consumer goods reached 39.2 trillion yuan, down by 3.9% compared with the previous year. Specifically, the total retail sales of consumer goods by enterprises above designated size reached 14.33 trillion yuan, down by 1.9%. In terms of regions, retail sales in urban areas reached 33.91 trillion yuan, down by 4%; and retail sales in rural areas stood at 5.29 trillion yuan, down by 3.2%. Grouped by consumption patterns, catering revenue was 3.95 trillion yuan, down 16.6%; and retail sales of goods were 35.25 trillion yuan, down 2.3%.

The sales growth of upgraded consumer goods accelerated. In the fourth quarter, the retail sales of communication equipment, cosmetics, gold, silver and jewelry by enterprises above designated size grew by 26%, 21.2% and 17.3% respectively, or 16 percentage points, 7.1 percentage points and 5 percentage points higher than in the third quarter.

In the fourth quarter, the total retail sales of consumer goods grew by 4.6% year on year, which was 3.7 percentage points higher than in the third quarter. In December, the total retail sales of consumer goods grew by 4.6% year on year, or 1.24% month on month. In 2020, the national online retail sales reached 11.76 trillion yuan, up by 10.9% year on year. Specifically, the online retail sales of physical goods was 9.76 trillion yuan, up by 14.8%, accounting for 24.9% of total retail sales of consumer goods, or 4.2 percentage points higher than that of the previous year.

Fifth, investment in fixed assets rebounded steadily and investment in high-tech industries and social sectors grew fast.

In 2020, the investment in fixed assets (excluding rural households) reached 51.89 trillion yuan, up by 2.9% from last year. Specifically, investment in infrastructure was up by 0.9%, manufacturing down by 2.2%, and real estate development up by 7.0%. The floor space of commercial buildings sold reached 1.76 billion square meters, up by 2.6%, while the total sales of commercial buildings was 17.36 trillion yuan, up by 8.7%. The growth of investment in all three industries showed positive trends. Specifically, investment in the primary industry went up by 19.5%, 0.1% in the secondary industry, and 3.6% in the tertiary industry. Private investment was 28.93 trillion yuan, up by 1.0%, and investment in high-tech industries rose 10.6%, 7.7 percentage points higher than the total investment, with investment in high-tech manufacturing and services rising 11.5% and 9.1%, respectively. In terms of high-tech manufacturing, investment in pharmaceutical manufacturing and computers and office devices grew by 28.4% and 22.4%, respectively. In terms of high-tech services, investment in e-commerce services and information services also grew by 20.2% and 15.2%, respectively. The investment in social sectors rose by 11.9%, 9.0 percentage points higher than the total investment. Likewise, investment in the health and education industries went up by 29.9% and 12.3%, respectively. In December, investment in fixed assets grew by 2.32% month on month.

Sixth, foreign trade achieved positive growth and trade structure continued to optimize.

In 2020, the total imports and exports of goods reached 32.16 trillion yuan, an increase of 1.9% over last year. The exports amounted to 17.93 trillion yuan, up by 4%, while the imports were 14.22 trillion yuan, down by 0.7%. The trade balance achieved a 3.71 trillion yuan surplus. Exports of mechanical and electrical products grew by 6%, accounting for 59.4% of the total exports, which was 1.1 percentage points higher than that of last year. Imports and exports of general trade accounted for 59.9% of the total imports and exports, an increase of 0.9 percentage point compared to last year. Imports and exports by private enterprises grew by 11.1%, accounting for 46.6% of the total imports and exports, which was 3.9 percentage points higher than that of last year. In December, the total imports and exports of goods were 3.2 trillion yuan, up by 5.9% year on year. Specifically, the total exports reached 1.86 trillion yuan, up by 10.9%, and the total imports were 1.34 trillion yuan, down by 0.2%. The trade balance achieved 516.8 billion yuan in surplus.

Seventh, growth of consumer prices slowed and producer prices for industrial products dropped.

In 2020, consumer prices increased by 2.5%, lower than the 2.9% growth of the year before and also lower than the expected annual target of around 3.5%. To be more specific, prices went up by 2.3% in urban areas and up by 3% in rural areas. Grouped by commodity categories, prices for food, tobacco, and alcohol went up by 8.3%; clothing down by 0.2%; housing down by 0.4%; articles and services for daily use remained the same; transportation and communication down by 3.5%; education, culture, and recreation up by 1.3%; medical services and health care up by 1.8%; and other articles and services up by 4.3%. Breaking down food prices, grain prices rose 1.2%, the price of fresh vegetables grew 7.1%, and pork prices increased 49.7%. The core CPI, excluding the prices of food and energy, went up by 0.8%. In December, the consumer price went up by 0.2% year on year and up by 0.7% month on month. In 2020, producer prices for industrial products went down by 1.8% over last year, and in December, went down by 0.4% year on year and up by 1.1% month on month. The purchasing prices for industrial producers decreased by 2.3% over last year, and in December, maintained the same level year on year, or up by 1.5% month on month.

Eighth, employment was generally stable, and the surveyed unemployment rate in urban areas fell to the level observed last year.

In 2020, 11.86 million new jobs were created in urban areas, notably higher than the expected goal of over 9 million a 131.8% increase on the annual target. In December, the surveyed unemployment rate in urban areas was 5.2%, the same as that of last year. Specifically, the surveyed unemployment rate among those aged between 25 and 59 was 4.7%, also the same as that of 2019. In 2020, the average annual surveyed unemployment rate in urban areas stood at 5.6%, lower than the expected target of around 6%. The surveyed unemployment rate in 31 major cities in December was 5.1%. At the end of 2020, the registered unemployment rate in urban areas was 4.24%, lower than the expected target of around 5.5%. The number of rural migrant workers reached 285.6 million, 5.17 million less than that of last year, or down by 1.8%. Specifically, migrant workers working in their home provinces totaled 116.01 million, down by 0.4%; migrant workers working outside their home provinces totaled 169.59 million, down by 2.7%. The average monthly income for migrant workers was 4,072 yuan, up by 2.8% over last year.

Ninth, resident income grew at the same pace as the economy and the ratio of per capita disposable income between urban and rural residents continued to narrow.

In 2020, the nationwide per capita disposable income was 32,189 yuan, a nominal increase of 4.7% over that of last year and a real increase of 2.1% after deducting price factors, which generally grew at the same pace as the economy. In terms of those citizens with permanent residence, the per capita disposable income of urban households was 43,834 yuan, a nominal growth of 3.5% and a real growth of 1.2% after deducting price factors. The per capita disposable income of rural households was 17,131 yuan, a nominal growth of 6.9% and a real growth of 3.8% after deducting price factors. The per capita disposable income of urban households was 2.56 times that of rural households, 0.08 less than that of last year. The median of the nationwide per capita disposable income was 27,540 yuan, a nominal increase of 3.8% over that of last year. Taking the per capita disposable income for nationwide households as compared by income quintiles, that of the low-income group reached 7,869 yuan, the lower-middle-income group 16,443 yuan, the middle-income group 26,249 yuan, the upper-middle-income group 41,172 yuan, and the high-income group 80,294 yuan.

In 2020, the nationwide per capita consumer spending was 21,210 yuan, a nominal decline of 1.6% or a real decline of 4% after deducting price factors. Specifically, the per capita consumer spending of urban households was 27,007 yuan, a nominal decline of 3.8%, while the per capita consumer spending of rural households was 13,713 yuan, a nominal growth of 2.9%.

Generally speaking, the national economy in 2020 recovered steadily, notable results were achieved in stabilizing employment and ensuring people's basic needs, a decisive success was made in eradicating extreme poverty, the 13th Five-Year Plan came to a satisfactory conclusion, and the task of building a moderately prosperous society in all respects will soon be completed. However, the changing COVID-19 situation and external environment pose a multitude of uncertainties and the foundation for economic recovery is yet to be consolidated. At the next stage, we must take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, implement the spirit of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference, adhere to the general working tone of making progress while maintaining stability, align ourselves with the new development phase, stick to the new development philosophy, foster a new development pattern, unswervingly deepen reform and opening up and innovation, consolidate and proliferate the gains made in epidemic prevention and control as well as economic and social development, take solid steps to ensure stability in six areas, fully carry out tasks to maintain security in six fronts, and implement macro policies in a science-based and precise manner to keep the economy performing within a reasonable range and to ensure a good start of the 14th Five-Year Plan period (2021-2025).

Hu Kaihong:

Thank you, Mr. Ning. The floor is now open to questions.

CCTV:

Due to the huge impact of the pandemic and a grave and complex environment both at home and abroad, China's economy recovered quarter by quarter in 2020 after a decline in the first quarter. What do you think of the economy throughout the year? Did we meet the goals and tasks for the year? Thank you.

Ning Jizhe:

Thanks for your questions. 2020 was an unusual year in China's history. In 2020, we faced with a grave and complex environment both at home and abroad on account of the huge impact of the pandemic in particular, but under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all localities and departments put the people and their lives first, adhered to the general working guideline of making progress while maintaining stability, coordinated the work of epidemic prevention and control and economic and social development, pledged stronger macro policies to offset the economic impact of COVID-19, took solid steps to ensure stability in six areas, and fully carried out tasks to maintain security in six fronts. Major strategic achievements were made in epidemic prevention and control, and the main goals and tasks of economic and social development were accomplished better than expectation. The 13th Five-Year Plan came to a satisfactory conclusion and the task of building a moderately prosperous society in all respects will soon be completed. The achievements were mainly shown in the following aspects.

First, major progress has been made in coordinating epidemic response and economic and social development. Thanks to the joint efforts of the whole country, China was the first to bring the epidemic under control, to resume work and production, and to achieve positive economic growth. By late March, the spread of COVID-19 on the mainland had been initially halted, and by mid-April, more than 90% of the enterprises above designated size had resumed operation. The GDP grew by 3.2% in the second quarter, turning from negative to positive, and by 4.9% in the third quarter, 6.5% in the fourth quarter, and 2.3% for the whole year. China is expected to be the world's only major economy to achieve positive economic growth in 2020. There are 18 major economies in the world each with a GDP over US$1 trillion, and economic data from most of these countries is not yet available. Based on the data from the first three quarters of 2020, China is the only major economy to register positive growth and the only one with positive growth for the whole year. In 2020, China's GDP reached 101.6 trillion yuan, exceeding a new watermark of 100 trillion yuan.

Second, decisive success has been achieved in eradicating extreme poverty. All rural residents below the current poverty line have been lifted out of poverty, and all 832 impoverished counties have been raised out of poverty. Extreme poverty has been eliminated, the first time in Chinese history. The personal income for farmers in poor areas has increased rapidly. In 2020, the nominal per capita disposable income growth of rural residents in Guangxi, Sichuan, Guizhou, Yunnan, Gansu, Ningxia, and Xinjiang, the seven provinces (autonomous regions) with a relatively large impoverished population, were all 0.2 to 1.7 percentage points higher than that of the rural residents across the country.

Third, remarkable results have been secured in macro-regulation, with quarterly indicators for economic growth returning to normal levels. In the fourth quarter, China's GDP and the added value of the industrial enterprises above designated size grew by 6.5% and 7.1% year on year, respectively, and 0.7 and 1.1 percentage points higher than the same period of 2019. The annual employment and price targets have been well met. In 2020, 11.86 million new urban jobs were created in the country, surpassing the target set for the year. The annual surveyed urban unemployment rate averaged 5.6% nationwide, lower than the expected target of about 6%. The consumer price index (CPI) for 2020 rose by 2.5% over the previous year, lower than the projection of around 3.5%. Growth in personal income was basically in step with economic growth. In 2020, the per capita disposable income of Chinese citizens grew by 2.1% in real terms, basically in line with economic growth. Overall, the balance of payment has been improved. By the end of 2020, China's foreign exchange reserves stood at US$3.22 trillion, an increase of US$108.6 billion year over year. Energy consumption per unit GDP has been reduced by around 0.1% in 2020 when compared to 2019. The main targets for macro-regulation set out in the government work report have been achieved and exceeded expectations.

Fourth, tasks have been carried out to ensure stability on six fronts (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations) and guarantee stability in six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots governments), and effective results have been achieved. Employment has been safeguarded. In December, the surveyed urban unemployment rate of the main working population aged 25 to 59 nationwide registered 4.7%, a return to levels seen during the same period of 2019. People's livelihoods have been effectively ensured. In 2020, the per capita net transfer income of Chinese citizens registered a nominal year-on-year growth of 8.7%, indicating greater efforts to meet the basic needs of the people. The vitality of market players have been increased. In the first 11 months of 2020, the profits of industrial enterprises above designated size grew by 2.4% year on year, maintaining double-digit growth for six months in a row. Grain and energy supply have increased. In 2020, grain output totaled 669.5 billion kilograms and the total primary energy production increased by some 2.8% over the previous year. Industrial and supply chains have been basically stable, and the growth of industries has continued to expand. In 2020, added value growth was reported in 25 out of the 41 industrial categories of the industrial enterprises above designated size, five categories more than that of the first three quarters. The functioning of grassroots governments has been well maintained. From January to November, expenditures in the general public budget for social security and employment, housing security, and poverty alleviation  all related to the guarantee in three areas of the grassroots governments (people's livelihood, employment, functioning)  rose by 9.8%, 9.5%, and 9.2%, respectively.

Fifth, reform and opening-up have created development miracles. Enterprises across various types of ownership operate more efficiently. In November, state holding industrial enterprises above designated size reported double-digit profits and year-on-year growth, registering positive growth for the sixth consecutive month. From January to November, the profits of industrial enterprises above designated size with foreign investment and investment from Hong Kong, Macao, and Taiwan grew by 4.3% 1.7 percentage points higher than in the first three quarters. The profits of private industrial enterprises above designated size increased by 1.8%, compared with a decline of 0.5% in the first three quarters. All these show that industrial enterprises with various types of ownership have experienced a comprehensive improvement in their efficiency. Supply-side structural reform has been deepened. China's industrial capacity utilization rate reached 78% in the fourth quarter, up 1.3 percentage points over the third quarter,  the highest since 2013. The reforms to streamline administration and delegate power, improve regulation, and upgrade services have continued to show results. From January to November, an average of 22,000 new enterprises were established every day, with a net increase of 12,000 per day. In 2020, the added value of high-tech manufacturing grew by 7.1% over the previous year, 4.3 percentage points higher than that of all the enterprises above designated size, and the online retail sales of goods increased by 14.8%. The growth in foreign trade and inbound investment was better than expected. In 2020, China's total import and export of goods reached a record high, up 1.9% over the previous year, despite a sharp decline in global trade and cross-border investment. From January to November, China's utilized foreign capital increased by 6.3% year on year.

Sixth, historic achievements in the building of a moderately prosperous society in all respects have been made. The main goals set out in the 13th Five-Year Plan have been fulfilled. Our GDP exceeded 100 trillion yuan and the per capita GDP exceeded US$10,000 in 2020. The economic structure has continued to improve; major projects have been basically completed, and; our economic, scientific, and technological strength, as well as the composite national strength, have risen to new highs. Major breakthroughs have been made in the three critical battles against poverty, pollution, and major risks, with accomplishments in the fight against poverty winning international recognition. Approximately 55.75 million rural residents have been lifted out of poverty. The first poverty reduction surveys show that all 13.85 million registered poor households have had their basic living needs met and have access to compulsory education, basic medical services, housing, and safe drinking water. Remarkable results have been achieved in pollution prevention and control. In 2020, the proportion of days with good air quality in 337 cities at or above the prefectural level reached 87%, an increase of 5 percentage points over the previous year. Progress has also been made in preventing and defusing major risks. Financial risks were manageable on the whole and the outstanding local government debt was within the budgeted limit approved by the National People's Congress. People's living standards have improved markedly. Over the past five years, more than 60 million urban jobs have been created. China has established the world's largest social security system, with its basic medical insurance covering over 1.3 billion people and basic old-age insurance covering nearly 1 billion people. Coordinated efforts have been made to implement the Five-sphere Integrated Plan, making coordinated progress in the economic, political, cultural, social, and eco-environmental fields. The confidence, pride, unity, and cohesion of the Party and the people of all ethnic groups have been enhanced remarkably.

In general, China's economy has recorded an extraordinary accomplishment in an extraordinary year, delivering results that have satisfied the people, won international recognition, and will go down in history. These achievements were hard-won after overcoming enormous difficulties, with COVID-19 still wreaking havoc around the world, the world economy falling into a severe recession, and the external environment becoming more complex and graver than before. These accomplishments are attributed to the strong leadership and sound policy-making of the CPC Central Committee with Comrade Xi Jinping at its core and the concerted efforts of the people of all ethnic groups, speaking volumes about the advantages of the socialist system with Chinese characteristics. Thank you.

China National Radio:

In 2020, China's GDP exceeded 100 trillion yuan. What does this mean for China's economy? What is the significance for establishing a new development pattern? Thank you.

Ning Jizhe:

These questions are very much to the point. China's GDP has now exceeded 100 trillion yuan. This means that China's economic and technological strength, and composite national strength have taken a big step forward. The achievement is of great symbolic significance in building a moderately prosperous society in all respects and embarking on a new journey of building a modern socialist country in all respects.

First, it marks the continuing rise of China's composite national strength. China's GDP reached 101.6 trillion yuan in 2020, surpassing 100 trillion yuan for the first time in its history. The Chinese economy reached 10 trillion yuan in 2000, exceeded 50 trillion yuan in 2012. Over the past 20 years, the Chinese economy expanded 10 times, which is a remarkable achievement. Converted at the prevailing average annual exchange rate, China's GDP in 2020 reached $14.7 trillion, ranking second in the world, and it is expected to account for around 17% of the global economy. In 2020, its per capita GDP exceeded $10,000 for the second consecutive year, which consolidated China's position among upper middle-income countries and narrowed the development gap with high-income countries.

Second, it marks the continuous improvement of China's scientific and technological strength. Major sci-tech achievements were made over the previous year. Chang'e-5 successfully landed on the moon and returned with samples. China's Mars probe Tianwen-1 was successfully launched. The Five-hundred-meter Aperture Spherical Radio Telescope (FAST) was officially put into operation. The Beidou-3 global navigation satellite system was put into operation. The manned submersible Fendouzhe (Striver) completed a 10,000-meter dive. And, the Jiuzhang quantum computer was successfully developed. The poetic line "[c1] We can clasp the moon in the sky and catch turtles in the deep sea" has now become reality. Scientific and technological innovation is becoming increasingly vigorous, injecting new vitality into high-quality economic development.

Third, it marks significant gains in China's economic strength and a remarkable increase in its industrial and agricultural productivity. In 2020, total grain output reached a record high and continued to rank first in the world. The output of more than 220 industrial products ranks No. 1 in the world, and the added value of the manufacturing sector is expected to rank first in the world for 11 consecutive years. China's infrastructure has constantly improved. The high-speedrailway network hasreached38,000km and expressways exceeded 155,000 km. 5G connections in China has exceeded 200 million, ranking first in the world. The modern service sector, including information services, business services, research and development services and marketing services, continues to develop. The capability of the financial sector for serving the real economy has been enhanced, and the country's social productivity has reached a new level.

Fourth, it has laid a solid foundation for China to build a new development pattern. We are accelerating the formation of a new development pattern with the domestic market as the mainstay and the domestic and international markets mutually supporting each other. The key is to tap the potential of domestic demand, especially consumer demand. China has the largest population and the largest middle-income group in the world. In 2020, the total retail sales of consumer goods reached almost 40 trillion yuan, and final consumption expenditure exceeded 55 trillion yuan. The total capital formation was close to 45 trillion yuan. This will further boost the advantage of the super large Chinese market.

At the same time, we should also clearly recognize that China is still the world's largest developing country, and its per capita GDP is still slightly lower than the global average. Compared with the major developed countries, China still lags far behind. The basic reality that China is still in the primary stage of socialism has not changed. The issue of unbalanced and inadequate development is still prominent, and there is still a large gap between the development of urban and rural areas. Meanwhile, innovation capacity still fails to meet the requirements for high-quality development. In order to achieve long-term economic and social development goals and build China into a modern socialist country, we still need to work hard and make unremitting efforts. Thank you.

Reuters:

In 2020, China's total retail sales of consumer goods dropped by 3.9% and growth in December was also weak. Does this have to do with the COVID-19 epidemic? Will China introduce any measures to stimulate consumption in 2021? How do you predict the rates for investment and export in 2021? Thank you.

Ning Jizhe:

I can see that you read our statistics before raising this question. As you know, consumption plays a basic role in economic development. In the past year, the total retail sales of consumer goods registered negative growth but its growth in Q3 and Q4 had trended positive. In Q4, rates grew by 4.6%, which is close to normal levels in recent years. The fluctuations in December were caused by the resurgence of COVID-19 cases in several domestic locations. But if we look at the whole picture, as production supplies continue to increase, domestic consumption can still play a basic role in boosting economic development. In 2021, we can see many positive factors supporting stable economic recovery. China's economy is well-conditioned to maintain its recovery momentum. Though we are facing relatively high pressure in preventing inbound cases and a domestic resurgence, our economy is still growing on strong fundamentals.

First, we have a solid material foundation. Agricultural foundations are growing stronger, with total grain output exceeding 1.3 trillion jin (650 million tons) for six consecutive years. Meanwhile, the industry is playing a more dominant role in the national economy, and our total industry added value is over 30 trillion yuan. Infrastructure is also improving as transportation, telecommunications, energy, and the water conservation sector play a more important role in supporting the economy. These are strong material foundations for us to guard against various risks, maintain steady economic recovery, and ensure the basic well-being of the Chinese people.

Second, we have a complete industrial system. After years of effort, China has become the only country in the world to obtain all industrial categories listed in the United Nations industrial classification. Our total trade in goods ranks first in the world, and the country is the largest trading partner of 120 countries and regions. In the past year, in the face of COVID-19, China's industrial system has demonstrated a strong ability for self-adjustment and resilience. In 2021, China's complete production coordination system and its supporting capacity are bound to play a major effective role in dealing with various uncertainties.

Third, we have a huge market. With a population of 1.4 billion people, including a middle-income population of 400 million, and a total land area of 9.6 million square kilometers, China boasts the world's fastest-growing domestic market. The advantages of the huge market are obvious. With increased per capita income, the structural adjustment and upgrades in consumption will drive upgrades to the industrial, investment, and regional economic structures, providing a huge force for sustainable economic development. In 2021, our vast domestic market will provide enough room for economic growth and manoeuvre.

Fourth, we have built strong technological power. China is proving its strong momentum in technological innovations, boasting the world's second-largest R&D investment and a top filer of international patents, both driven by the development of hi-tech industries and emerging industries with strategic importance. China's emerging industry maintains strong momentum despite the economic headwinds over the past several years as well as the COVID-19 pandemic. The industry digitalization and the industrialization of the digital economy are also in full swing, which in turn will boost additional online consumption. These are the driving forces of China's high-quality economic development.

Fifth, we have abundant human resources. China has the world's largest workforce, with nearly 900 million people of working age (16 to 59 years old), 200 million skilled workers, and the world's largest population of research personnel. These also give continuous intellectual support to the country's high-quality development.

The strong CPC leadership and China's institutional advantages ensure stable and long-term economic development and social stability. The CPC Central Committee's far-sightedness and its sound decisions overall, the institutional advantage of socialism with Chinese characteristics that enables us to pool all resources to complete major missions, the sophistication of China's economic governance, and precise and effective macro-control policies are the keys to successfully preventing and controlling COVID-19 while making achievements in socio-economic development.

Despite the recent COVID-19 resurgence in some areas, the impact of COVID-19 on the economy is generally controllable. As the pandemic continues to spread around the globe, China's outbreak of locally-transmitted cases and cluster infections is posing some uncertainties to economic recovery, which is reflected in the slowed growth rate of December's retail sales.

Generally speaking, we have the abilities and the conditions to contain the spread of COVID-19. Thanks to our rich experience in COVID-19 response in the early stage of the pandemic, we have adopted swift, effective, and scientific measures to contain the spread of the coronavirus in areas experiencing a resurgence in COVID-19 and reduce the impact of lockdown measures on production and life. Currently, production and life in most regions are back on track, economic operations are generally stable, and the impact of COVID-19 is controllable. Of course, we will continue to work hard and keep economic operations within a reasonable range. In response to your question about our investment and consumption policies, we will follow the instructions put forward during the fifth plenary session of the 19th CPC Central Committee as well as the Central Economic Work Conference, implement our financial, monetary, employment, investment, consumption, regional, and industrial policies more precisely, overcome difficulties that arise, keep economic operations within a proper range, and promote the sustainable and healthy development of China's economy.

In general, consumption and investment played key roles in economic development in 2020. The overall fixed-asset investment, investment in the tertiary industry, and investment in the social sector and infrastructures all achieved positive growth. In 2021, we will continue to increase our investment in areas of weakness. Following the instructions of the Central Economic Work Conference, we will ensure to balance investment in both strong and weak areas and boost the overall quality of our investment.

Imports and exports bucked the trend and increased last year. The GACC held a press conference two days ago to introduce the situation. Imports and exports in the first two quarters of last year were severely affected by COVID-19 but a series of effective measures were later adopted to tackle the issues. In addition, China's relatively complete industrial system ensures logistics services and meets the demands of epidemic prevention products, household goods, and office supplies for some countries in the world. Because of the advantages that I have just introduced, China's imports and exports rebounded in the third and fourth quarters and the economy achieved positive growth throughout the year. This year, the coronavirus has continued to spread globally and nations around the world have relatively large demands for epidemic prevention products and daily necessities. Based on boosting domestic demand, we should also meet the needs of foreign markets and expand external demand. It is expected that imports and exports will maintain current momentum. Thank you.

Hong Kong Bauhinia Magazine:

How is the progress in China's high-quality development in 2020? Could you elaborate on that? In your opinion, what is the focus of promoting high-quality development in 2021? Thank you.

Ning Jizhe:

This is a good question. Last year, the coronavirus affected our economic growth and development. However, while stabilizing employment, ensuring people's livelihoods, and maintaining the fundamentals of the economy, all regions and departments have been unswervingly implementing new development concepts and promoting high-quality development, continuing to deepen reforms, expanding opening up, and cultivating new drivers of growth. The quality and efficiency of economic growth have been steadily improved.

First, innovation, the primary driving force of development, continues to be stimulated. New industries, new forms of business, and new products are developing rapidly. From January to November in 2020, the operating income of strategic emerging service enterprises above the designated size increased by 8.6% year-on-year, 7 percentage points higher than that of the service industry above the designated size. The proportion of online retail sales of physical goods reached 24.9%, up 4.2% over the previous year; the output of industrial robots, new energy vehicles, and integrated circuits all achieved rapid growth and increased by 19.1%, 17.3%, and 16.2%, respectively. The number of small and medium-sized tech enterprises and high-tech enterprises has exceeded 200,000. Finally, major breakthroughs have been made in the scientific exploration of space and the sea, as I mentioned earlier.

Second, coordination has increasingly become an endogenous feature. New steps have been taken in the transformation of the industrial structure. The added value of the equipment manufacturing industry and the high-tech manufacturing industry increased by 6.6% and 7.1%, respectively, 3.8 and 4.3 percentage points higher than that of all industries above the designated size. The added value of the tertiary industry accounted for 54.5% of China's GDP, up 0.2 percentage point over the previous year. New progress has been made in the adjustment of the demand structure. Investment in high-tech industries and social fields climbed by more than 10% over the previous year to 10.6% and 11.9%, which are 7.7 and 9 percentage points higher than the total investment, respectively. The gap between urban and rural development continued to narrow. The income of rural residents has grown faster than that of urban residents, and the urbanization rate of permanent residents has exceeded 60%.

Third, we made major headway toward green development. Energy conservation and consumption reduction efforts have delivered results. The annual energy consumption per unit of GDP has dropped. The proportion of consumption of natural gas, water, nuclear, wind, solar energy, electricity, and other clean energies has increased by 1 percentage point over the previous year. The environment has also improved significantly. The PM2.5 concentration of 337 cities at or above the prefecture level across the country dropped by 8.3% compared with the previous year. In terms of water environment, among the 1940 national surface water assessment sections, the proportion of water with good quality (Grade I-III) increased by 8.5 percentage points.

Fourth, the path to opening up has become broader. In 2020, we celebrated the 40th anniversary of the establishment of Shenzhen Special Economic Zone and other special economic zones, and the 30th anniversary of the development and opening up of Shanghais Pudong district. Pilot projects are exemplary and stimulate economic development. In the context of shrinking world trade and cross-border investment, China's total import and export of goods and the actual use of foreign capital have both achieved positive growth. The actual use of foreign capital during the last month of 2020 has not been officially announced. From January to November, the figure increased by 6.3%. The actual use of foreign capital has played a major role in stabilizing economic fundamentals. In the past year, the construction of the Hainan Free Trade Port has also been accelerated. We have had active economic and trade exchanges with countries along the Belt and Road. The Regional Comprehensive Economic Partnership Agreement (RCEP) was officially signed and the China-EU Investment Agreement negotiations were completed. These all provide a strong impetus for open development.

Fifth, sharing as the fundamental goal has been further emphasized. Poverty alleviation has achieved remarkable results. We have eliminated both absolute poverty and overall regional poverty. The employment situation is generally stable, and the surveyed unemployment rate has returned to the level of the same period of the previous year. The nationwide surveyed unemployment rate in urban areas peaked in February, reaching 6.2%, but in December, the number dropped to 5.2%. The quality of the life of residents has improved significantly, and the ownership of consumer durables has grown rapidly. The construction of a multi-level social security system has been accelerated. The development of education, culture, health, and other social sectors have been stimulated and the ability to guarantee basic public services has been continuously strengthened.

2021 is the first year of the 14th Five-Year Plan, the theme of which is to promote high-quality development. We must continue to take development as the Party's top priority in governing and rejuvenating the country, unswervingly implement the new development concepts of innovation, coordination, greenness, openness, and sharing, and continue to consolidate epidemic prevention and control and restore economic stability and boost development. We strive to maintain economic operations within a reasonable range and create a favorable environment for high-quality development. Focusing on improving the quality and efficiency of development, we will seek coordinated development of economic quality, structure, scale, speed, efficiency, and safety, and integrate high-quality development concepts into all fields and levels of economic society. Thank you.

Bloomberg:

We have two technical questions. I'm wondering what the breakdown is for the contribution to growth from net exports, consumption, and investment? Were also interested in when China's birth rate figure will be released? Thank you.

Ning Jizhe:

Just now I mentioned that investment, consumption, and exports are referred to as a troika of growth, and you brought up a direct question. We will announce the breakdown of the troika tomorrow. To evaluate the impact of the three major demands on the economy, I would like to first introduce the total amount.

First, in terms of total volume, the final consumption rate in 2020 was close to 55%. From 2011 to 2019, China's consumption rate averaged 53.4%. Despite the impact of the coronavirus in 2020, the final consumption expenditure still accounted for 54.3% of GDP, 11.2 percentage points higher than the total capital formation, the highest proportion in recent years. Consumption is still the anchor of a stable economy.

Second, from the perspective of incremental growth, the role of consumption in stimulating economic growth has also increased each quarter. With the steady recovery of China's economic operations, consumptions driving force on economic growth has increased quarter by quarter. In the fourth quarter, the total retail sales of consumer goods increased by 4.6% year on year, and the growth rate was 3.7 percentage points higher than that in the third quarter; and final consumption growth drove economic growth by 2.6 percentage points, an increase of 1.2 percentage points from the third quarter. As the epidemic is more effectively controlled, the momentum of consumer demand will be further restored. The contribution rate of net exports of the trade in goods and services to economic growth during the past year had still been positive. Now, in order to measure the impact of imports and exports on economic development, we should not only look at the growth rate or contribution rate, but also the total amount. First of all, incremental growth has been a positive contributing factor. Looking at the total amount, the total import and export volumes are equivalent to the proportion of China's GDP, which is relatively high among major countries, accounting for more than 30%. Major countries generally focus on domestic demand. Under open conditions, in order to achieve economic circulation, China's proportion is higher than that of strong economies such as the United States and Japan. Therefore, considering the two aspects, the role of imports and exports is still relatively important.

Economic growth depends on domestic demand, which conforms to the laws of economic development. The construction of a new dual-circulation development pattern requires better use of the advantages of the domestic super-large-scale market in China's opening-up. Looking at China's situation, there is still a lot of room for improvement in utilizing the fundamental role of consumption. The average contribution rate of final consumption expenditure to economic growth was around 60% from 2013 to 2019. If compared with the levels of 70% and 80% for developed economies, there is still much room for improvement. As the development stages are different, it is necessary to improve people's consumption abilities, improve consumption policies, improve the consumption environment, and find more areas for consumption growth. Utilizing the key role of investment is also very important. In 2020, investment played an active role in promoting economic recovery. Going forward, we must increase the intensity of effective investment and transform China's relatively high national savings rate into actual investment results. At the same time, we must unswervingly expand opening-up and make better use of the active role of the "three drivers of growth" consumption, exports and investment in building a new dual-circulation development pattern.

Just now, you asked about the population. The seventh national population census was launched on Nov. 1 last year. More than 7 million census takers went into communities, urban and rural areas. After much hard work, on-site registration has now been completed and the process of carrying out random quality checks and verifications, as well as preliminary summary is now underway. The census is conducted once every 10 years, and the previous sixth census was also conducted in November, with the results released in April of the following year. The results of this year's census will also be announced to the whole society in April. As such, we cannot provide the data today. I hope you can understand.

The fifth plenary session of the 19th CPC Central Committee has put forward requirements for population development strategies and policies for the next five years. The statistics departments will ensure the population data is true, accurate and reliable through population censuses and daily surveys, and provide a scientific basis for formulating strategic planning policies for population development. Thank you.

CNBC:

In terms of the economy this year, considering some important challenges, such as last year's consumption situation, some economists hope that consumption will account for a bigger part of China's development and play a larger role. There has also been much analysis into the spread of the pandemic at home and abroad, which has raised some concerns about the Chinese economy. What is your take on these issues? Thank you.

Ning Jizhe:

Facing the spread of the global pandemic, increasing the awareness of risks and concerns is extremely important. Looking around the world, the pandemic has rebounded two or three times in some countries, and uncertainties are growing internationally. The foundation for the recovery of the domestic economy is not yet solid. The overall indicators are picking up steadily and are better than expected, but some structural indicators are not ideal, while various problems cannot be solved in the short term. We must adhere to the general tone for work, which is seeking progress while maintaining stability, continue to promote stable economic recovery, and keep it within a reasonable range. We must look from the aspect of challenges, difficulties and risks, as well as the aspect of opportunities, advantages and hope. The challenges are unprecedented, as are the opportunities. On the whole, the opportunities are still greater than the challenges. Judging from the situation of macro-control and corporate recovery last year, some challenges will be transformed into opportunities once they have been overcome. For example, responding to the COVID-19 pandemic was originally a big challenge. However, due to our insistence on technological innovation and reform and opening-up, various market entities have played their parts, and development of the digital economy, entrepreneurship and innovation have become opportunities. Online retail sales, including online education and medical care, have developed well, while the combination of online and offline businesses has created even greater advantages.

The global pandemic is also a big challenge, and especially now we are under huge pressure to prevent imported infections and a domestic resurgence. Due to the pandemics impact, there has been large demand for anti-pandemic products, including face masks, protective suits and home office supplies. We have a complete industrial system and guaranteed international logistics, and are promoting the smooth flow of logistics, so that challenges have become opportunities, and positive trade growth has been achieved. We are satisfied by the data, but more importantly, we are also meeting the needs of people around the world in fighting the pandemic. Saving lives is more important than anything else. This is not only significant for the economy, but also for humanity. We have played a positive role in the world. In China, we insist on putting people and life first, so we must combine economic data with challenges and opportunities in our analysis. Our country is still in a period of strategic opportunities for development. Faced by challenges, we must give full play to our advantages and overcome difficulties to achieve sustained economic recovery, stable operations and healthy development. Thank you.

Hong Kong Commercial Daily:

What progress has been made in ensuring people's livelihoods in 2020? The growth of China's per capita disposable income has been weak, how do you regard this situation? What changes have there been in income levels in urban and rural areas? Thank you.

Ning Jizhe:

People's livelihoods are the top priority. Last year, notable results were achieved in ensuring people's wellbeing, as demonstrated in three key aspects: first, job growth continued to expand; second, prices remained generally stable; and third, incomes continued to rise. As I said before, we achieved the year's employment rate target, and the employment situation was better than expected. With support from economic recovery and employment-first polices, the number of newly employed people in urban areas totaled 11.86 million in 2020, well exceeding the goal of 9 million. The surveyed unemployment rate and registered unemployment rate, both for urban areas, were lower than expected. It shows that governments at all levels and market entities have all played a vital role in stabilizing and ensuring employment as the main macro-regulation target, and implementing the employment-first policies.

In addition, consumer prices remained generally stable. Affected by many factors, food prices, especially the price of pork, rose quickly starting around the beginning of last year. Faced with the epidemic, local governments, departments and market entities worked together to boost food supplies, in particular guaranteeing the production, distribution, and supply of hogs. After more than half a year of efforts, the number of hogs both available for slaughter and supplied to the market improved significantly in the fourth quarter. We increased pork imports and ensured domestic supply, resulting in a significant drop in prices during the fourth quarter. Pork prices rose by more than 100% at the beginning of last year, and increased for 19 consecutive months. Between October and December, pork prices then dropped by 2.8%, 12.5% and 1.3%, respectively. Food prices on the whole have also been effectively controlled, showing a downward trend.

Personal income growth exceeded expectations and was basically in step with economic growth. The per capita disposable income in the four quarters changed by -3.9%, -1.3%, -0.6% and 2.1% year on year in real terms, which was generally in step with economic growth. The main characteristics of the growth in residents' incomes can be seen from three aspects: First, net transfer income of residents has grown quickly. This resulted from the policies to ensure and improve people's basic livelihood, such as increasing the pension for retirees and strengthening social relief and temporary aid. The per capita net transfer income of residents nationwide grew 8.7% year on year; per capita old-age pension and retirement pension posted an 7.8% increase year on year; per capita income from social relief and subsidies grew 18.7%; and per capita income from policy-based living subsidies rose by 12.7%. Second, residents' income from salaries showed accelerated recovery through the policies of ensuring employment, including stabilizing employment and encouraging rural labor to move to other areas for employment. The per capita salary-based income of residents increased by 4.3% year on year, which was higher than the growth rate of China’s per capita disposable income, which was 2.1%. The average monthly income of migrant workers also rose by 2.8% over the previous year. Third, market entities improved net operating income, moving from decline to growth. Thanks to the measures including reducing taxes and fees, and providing financial support, household operations improved. The per capita net operating income grew 1.1% year on year in 2020, despite decline during the first three quarters due to the epidemic.

As for your second question, the income gap between urban and rural residents as well as people from different social groups continued to narrow. As I said before, the ratio between urban and rural residents per capita disposable income stood at 2.56, 0.08 lower than in 2019. The income of residents in western regions of the country grew by 6%, faster than 4.6% in eastern regions, showing that the income gap between different regions is also narrowing. The income growth rate of the low-income group was higher than that of residents nationwide. The per capita disposable income of the low-income group increased by 6.6% year on year in nominal terms, 1.9 percentage points higher than that of residents nationwide. The per capita disposable income of the low-income group in rural areas increased by 9.8% over the previous year, 5.1 percentage points higher than that of residents nationwide. As such, data on job creation, consumer prices and income show that the policies to ensure and improve people's livelihoods have yielded positive results.

In the next step, we will continue to promote steady economic recovery and provide stronger employment support for key groups. We will take more measures to stabilize employment, ensure supply and price stability, and strengthen basic living guarantees for disadvantaged groups. There should be solid progress in protecting market entities, sustaining the growth of urban and rural personal income, deepening the reform of the income distribution system, and further narrowing the income gap between urban and rural residents. Thank you.

China Daily:

My questions are for Mr. Ning. All three industries registered positive growth in 2020. What were the new situations and characteristics encountered during the year? Did industrial production return to a normal range in Q4? Thank you.

Ning Jizhe:

Your question is a request to provide a conclusion for 2020. With nationwide efforts, we not only saw overall positive growth but also coordinated recovery and development in all three industries. Viewing the year as a whole, the economy reopened in a steadily improving manner.

First, the position of agriculture as the foundation of the economy was further strengthened. Despite the COVID-19 epidemic and severe flooding, 2020 saw another bumper grain harvest. Hog production capacities recovered quickly and the output of poultry, eggs, and milk increased steadily. Agricultural production was better than expected and the value added of agriculture, forestry, animal husbandry, and fishery went up by 3% year on year a good performance compared with previous years. Growth was -3.2% for the first quarter, and 3.3, 3.9, and 4.1% for the second, third, and fourth quarters, respectively. Modern agriculture also performed well with several new super rice varieties developed, which have a yield of 1,000 kilograms per mu.

Second, industrial production stabilized and rallied. Industry as a whole, especially manufacturing, saw steady recovery quarter by quarter. The value added of industrial enterprises above designated size grew 2.8% year on year in 2020. The growth for the manufacturing sector was 3.4%, faster than the general growth. The growth for the first, second, third, and fourth quarter was -8.4, 4.4, 5.8, and 7.1%, respectively, and demonstrate that growth is already returning to normal. In particular, the role of pillar industries strengthened and the recovery of equipment manufacturing quickened. In 2020, value added to the equipment manufacturing sector grew 6.6% year on year, 3.8 percentage points higher than the general growth of industrial enterprises above designated size. The sector contributed 70.6% of the overall growth of industrial enterprises above designated size. It reported double-digit growth in both the third and fourth quarters. New industries and products thrived. In 2020, the value added of high-tech manufacturing enterprises above designated size expanded 7.1% from the previous year, 4.3 percentage points higher than the general growth of all industrial enterprises above designated size. Many products saw their production increase significantly. New products such as 3D printing equipment, smart watches, civilian UAVs, and IC wafers saw their production more than double in response to huge market demand.

Third, the service industry gradually recovered. The sharp decline at the beginning of the year was followed by a gradual recovery quarter by quarter. Major indicators improved continuously, new growth drivers were active, and market confidence was constantly enhanced. In 2020, the value added to the service industry grew 2.1% from the previous year. The gain for the first, second, third, and fourth quarters were -5.2, 1.9, 4.3, and 6.7%, respectively. The modern service industry, led by new technologies, showed relatively good growth. From January to November, business revenues for high-tech service enterprises, technology service enterprises, and enterprises of emerging service sectors of strategic importance increased 12, 11, and 8.6%, respectively. New business forms and models expanded quickly. The COVID-19 epidemic gave rise to new business models. The integration of physical and online stores picked up speed; new technologies such as 5G, AI, and Internet of Things were used widely, and online entertainment and commerce like short videos and live commerce saw trend-bucking growth. Working from home, online education, online healthcare and other new business models boomed, injecting new vitality into the economy and are bound to continue growing this year.

In December 2020, the value added to industrial enterprises above designated size increased 7.3% year on year, the highest growth of 2020. However, judging from the past two years, December was still within the normal range. In March 2019, for example, the figure was 8.5%.

The transformation of traditional industries also quickened to better meet demand, to further strengthen R&D and sales, and to promote the integration of the service sector through industry and agriculture. China's industries have broad prospects and are bound to unleash new potential. Thank you.

Hu Kaihong:

Today's press conference ends here. Thank you, Mr. Ning. Thank you, everyone.

Translated and edited by Zhang Liying, Zhou Jing, Xu Xiaoxuan, Li Huiru, Guo Yiming, Zhang Rui, Wang Yanfang, Wang Mengru, He Shan, Wang Yiming, Wang Qian, Yuan Fang, Wang Wei, Zhang Jiaqi, Yang Xi, Yan Xiaoqing, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Chen Yulu, vice governor of the People's Bank of China (PBOC)

Ruan Jianhong, spokesperson for the PBOC and head of its statistics and analysis department

Sun Guofeng, head of the monetary policy department at the PBOC

Zou Lan, head of the financial market department at the PBOC

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Jan. 15, 2021

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference. This is the latest in a series of briefings on China's economic performance in 2020. We are delighted to invite Mr. Chen Yulu, vice governor of the People's Bank of China (PBOC), to introduce China's financial statistics in 2020. He will also answer some of your questions. Also present are Ms. Ruan Jianhong, spokesperson for the PBOC and head of its statistics and analysis department; Mr. Sun Guofeng, head of the monetary policy department at the PBOC; and Mr. Zou Lan, head of the financial market department at the PBOC.

Now, I give the floor to Mr. Chen Yulu.

Chen Yulu:

Friends from the media, good afternoon.

2020 was an extraordinary year. The COVID-19 pandemic - a once-in-a-century health crisis - had a severe impact on social and economic development in countries around the world. Faced with the complex domestic and international landscape, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the People's Bank of China firmly implemented the decisions and plans made by the CPC Central Committee and the State Council, as well as the requirements set out by the financial stability and development committee under the State Council. We made comprehensive moves to push forward integrated statistical work in the financial sector and keep abreast of the epidemic dynamics and the conditions facing economic and social development. In response to the shifting situation, we adopted a flexible approach to adjust the intensity, pace, and focus of our monetary policy, thus creating a prudent and favorable monetary and financial environment for epidemic prevention and control, stability on the six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations), and security in the six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government). On Jan. 12, the PBOC published the 2020 Financial Statistics Report. Statistics showed that in 2020, China's main financial indicators were in line with expectations, and the financial system operated smoothly.

First, the growth of money and credit supply largely met the annual target. By the end of 2020, the M2 money supply increased by 10.1% year-on-year, 1.4 percentage points higher than that in the same period during the previous year; new RMB loans totaled 19.6 trillion yuan, an increase of 2.8 trillion yuan compared to the previous year; aggregate financing in the economy grew by 13.3%, 2.6 percentage points higher than that in the same period of the previous year. Throughout the year, the PBOC reduced required reserve ratios three times, unleashing 1.75 trillion yuan in liquidity for the real economy. We launched monetary policy measures involving more than 9 trillion yuan, achieving the policy goal of "maintaining moderate monetary aggregate, and reasonable and ample liquidity."

Second, the credit structure improved as loans to manufacturing firms and MSMEs (micro, small, and medium enterprises) continued to deliver benefits and targeted financial support for key areas of the real economy increased. In 2020, the outstanding balance of medium- and long-term loans to the manufacturing sector surged by 35.2%, 20.3 percentage points higher than that in the previous year. The growth rate has risen for 14 consecutive months. Inclusive loans to small and micro companies grew by 30.3%, 7.2 percentage points higher than that in the previous year. Additionally, the financial policy to curb housing prices gradually took effect, and growth in the outstanding balance of loans to the real estate sector fell for 29 consecutive months.

Third, supply-side structural reform in finance was deepened, and financing costs for the real economy dropped significantly. In 2020, the market-based interest rate reform moved forward and the switch of the benchmark for pricing existing floating-rate loans was completed as scheduled. The interest rate reform continued to deliver benefits and the transmission of monetary policy demonstrated higher efficiency, leading to a noticeable decline in interest rates on loans to enterprises. At the end of 2020, the weighted average interest rate on enterprise loans in China was 4.61%, 0.51 percentage points lower than in the same period of the previous year and the lowest level since records began in 2015. China's financial institutions did all they could to cut financing costs for enterprises and achieved the goal of saving enterprises 1.5 trillion yuan to boost the real economy.

Fourth, we offered financial support to win the "three battles" of risk management as well as poverty elimination and pollution control and achieved remarkable results. In 2020, the battle of preventing and defusing financial risks achieved important results. All P2P platforms have been "cleared up." Various types of high-risk financial institutions have seen orderly disposal, the size of "shadow banks" was scaled down, and asset-management product risks were contracted. The interbank operating relevance and nesting saw a continued reduction, while in the meantime, the PBOC firmly supported winning the battle of poverty alleviation through precisely targeted measures. More than 6.5 trillion yuan in loans for targeted poverty alleviation were issued in the past five years, comprising loans for impoverished people and for promoting industrial development. These loans benefited more than 90 million impoverished people and helped all impoverished counties to rise out of poverty. In recent years, the PBOC has offered support for green development and ecological civilization construction by providing green financing and has gained wide acclaim from abroad. Currently, our country ranks first globally in terms of green credit and second in the scale of green bonds.

Financial statistics data is the "transcripts" of the financial system. In 2020, facing the COVID-19 epidemic that raged worldwide and stricken by external risks, people working on the financial front put the interest of the people before everything else. We faced the difficulties head on, took action, and accomplished various tasks assigned by the Party Central Committee and the State Council, contributing financial powers to accomplishing the main objectives and tasks of the 13th Five-Year Plan and to securing a decisive victory in building a moderately prosperous society in all respects. 2021 marks the first year of 14th Five-Year Plan. The PBOC will fully implement the spirit of the fifth plenary session of the 19th CPC Central Committee and the Central Economic Work Conference and will prioritize stability, emphasize work, reduce risks, deepen reform and opening-up, and offer high-quality financial support to speed up the construction of new development patterns. I will stop here. Please raise your questions. Thank you.

Shou Xiaoli：

Thanks for the instruction of Mr. Chen. Next, journalists, please state the news outlet you belong to and then ask questions.

CCTV:

We know that this year we need to keep the growths of broad money, or M2, and the size of social financing to match the nominal economic growth. Does this mean that the size of the money supply will increase this year? What will the M2 growth rate be like this year? Thank you.

Chen Yulu:

Thank you to the journalist from CCTV. Maintaining growth of the M2 and the size of social financing to match the nominal economic growth is an important part of improving our country's modern monetary policy frame. I want to tell you all that "basically match" doesn't mean being of the exact same amount. The growth of the M2 and the size of social financing could be slightly higher or lower than the nominal economic growth - according to the economic situations and requirements of macroeconomic governance - to reflect the counter-cyclic adjustment in medium-to-long term monetary policy. And when the economy operates irregularly, for example when suffering major epidemics similar to the one that we're currently facing, economic growth could hugely deviate from the level of potential outputs. At that point, monetary policy should be decided according to a nominal economic growth that reflects potential outputs.

In 2020, being stricken by the epidemic, the PBOC continued to implement a prudent monetary policy and didn't adopt quantitative easing and other irregular monetary policy measures. The size of the balance sheet of the central bank maintained basic stability. Moreover, the monetary policy was flexible, moderate, and precisely targeted, and better hedged against the high uncertainty in a macro situation since the outbreak of the epidemic. Financial operating maintained stability and matched the level of potential output for our economy.

In 2021, the prudent monetary policy will be more flexible and precisely targeted, as well as rational and moderate, continuing to offer the necessary support for economic recovery. The PBOC will prioritize stability and not make rash decisions, and decide the intensity, rhythm, and emphasis of monetary policy flexibly according to the characteristics of epidemic prevention and control and socioeconomic development at various stages. It will make sure money supply growth and the size of social financing match the nominal economic growth, to support continued economic recovery and high-quality development via moderate monetary growth. Thank you.

CNR:

In 2020, the growth of the narrow measure of the money supply (M1) continued to rise, even by double digits in November. What's the reason for that? In 2021, will there be any changes to real estate financial policies? Thanks.

Chen Yulu:

Besides the growth of the broad measure of money supply (M2), people are also concerned about M1. At the same time, the real estate market is also the main concern for us, especially about how to financially stabilize it. The questions go to Ms. Ruan and Mr. Zou.

Ruan Jianhong:

I will answer your question about M1. As of the end of 2020, the M1 increased by 8.6% year on year to 62.56 trillion yuan, 4.2 percentage points higher than the same period in 2019, which is a relatively high growth. The demand deposits account for 90% of M1, which makes up the largest portion. According to the data on demand deposits collected by the PBOC's National Financial Basic Database, there are three major reasons for M1 growth in 2020:

First, China's prudent monetary policies have effectively supported the real economy. With structural policies supporting companies and stabilizing employment, traditional manufacturing and wholesale and retail sectors have received significant financial support. That financial support helped stabilize the cash flow for enterprises and increase their demand deposits. As of the end of last November, China's manufacturing and wholesale and retail sectors saw a year-on-year growth of 16.5%, amounting to 30% of the total demand deposits.

Second, some industries have received more fund support, but because some projects have not been fully implemented, some funds remain idle. From the statistics, industries like public management and business leasing account for a large proportion of the newly increased demand deposits. In these industries, there are some time periods between fundraising and investment, which leads to the temporary slowing of funds.

Third, the regulation of deposit products has promoted the increase in demand deposits. Since October 2019, the financial management administrations have continued to regulate products including structured deposits , and some funds have flowed into agreement deposits.

In the future, with the ease of the epidemic, the recovery of the economy, and the advance and progress of investment projects, capital spending will accelerate and the remaining demand deposits will decrease accordingly. Additionally, as the conversion from structured products into current deposits - due to regulation of deposit products - is reduced, we predict that the increase of M1 will be relatively steady.

Zou Lan:

I will answer the question concerning financial policies in the real estate sector. In recent years, adhering to the principle that the housing is for living in and not for speculation and targets for stabilizing land price, housing prices, and market expectations, the PBOC has implemented long-term mechanisms for the real estate market and intensified the financial management. We have performed our duties in the following aspects.

First, we have enhanced financial regulation in the real estate sector. We have guided the financial administrations to strengthen the monitoring and calculating of all funds flowing into real estate, allowed commercial banks to increase real estate loans at a reasonable speed, and promoted the flow of financial resources into major sectors and weak links such as manufacturing and small and micro enterprises,. Last year, the growth rate of real estate loans was lower than that of other loans for the first time in eight years. The proportion of the newly added real estate loans in all loans fell from 44.8% in 2016 to 28% last year.

Second, we have steadily implemented prudential management for real estate finance. On the one hand, we have carried out long-term mechanisms, implementing tailored housing regulations for different cities and adopting differentiated housing credit policies. On the other hand, we have prioritized rules and transparency and established fund monitoring and financing management rules for major real estate enterprises. Moreover, we have set up and improved a macro prudent management system for real estate finance.

Third, we have improved financial policies for housing rentals. Focusing on both housing purchases and renting, we have accelerated the study of financial policies to support the housing rental market. We will solicit public opinion in the days to come.

Going forward, the Central Bank will implement the deployments of the 5th Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference, and stick to the principle that "houses are for living in, not for speculation," encourage both housing purchases and rental, continue to implement tailored housing regulations for different cities so as to maintain continuity, consistency, and stability in our policies toward the real estate finance, and steadily implement the prudential management of real estate finance. We will increase financial support for the development of the housing rental market and promote the steady and healthy development of the real estate market. Thank you.

Bloomberg News:

What is the central bank's take on the renminbi's exchange rate? In the second half of last year, the renminbi exchange rate appreciated significantly against the U.S. dollar. Is there any concern that this trend will have some negative impact on exporters and the real economy? Moreover, what is the progress of Ant Group's rectification? Will it be required to break off some of its business? Thank you.

Chen Yulu:

Thank you for the two questions, both of which are issues that many are concerned about. First, I would like to invite Mr. Sun to answer your question regarding the exchange rate.

Sun Guofeng:

By the end of 2020, the exchange rate of the renminbi against the U.S. dollar had appreciated by 6.9% compared with the end of the previous year. The fluctuation range has not exceeded a historic level, such as those encountered in 2007 and 2008. The renminbi had appreciated by about 4% against a basket of currencies, with moderate annual volatility. The average exchange rate against the U.S. dollar for the whole year was 6.90 yuan, the same level as 2019. On the whole, the renminbi exchange rate remains basically stable at a reasonable level, which is in line with China's foreign trade and the fundamentals of its economy. Compared with other major currencies, the renminbi's appreciation against the dollar has also been moderate. Under the new system of a higher-level and open economy, the renminbi exchange rate is at a reasonable and equal level and the positive and negative impacts of exchange rate fluctuations on exports and the economy have been basically offset. The future trend of the renminbi exchange rate will depend on the domestic and foreign economic situation, international balance of payments, and changes in the international foreign exchange market. In general, the renminbi exchange rate will both rise and fall and the two-way floating of the renminbi will become normal. It will neither keep appreciating nor depreciating but will remain basically stable at a reasonable and equilibrium level. Thank you.

Chen Yulu:

Regarding the second question, Ant Group has set up a working group to rectify its business practices under the supervision of financial watchdogs. It is busy making a timetable for readjusting its business according to regulatory requirements. Moreover, it should maintain its business as usual and ensure the quality of financial services provided to the public. Financial regulators are maintaining close communication with Ant Group and more information and progress about the work will be updated. Thank you.

Economic Daily:

How does the People's Bank of China (PBOC) evaluate the inflation situation this year? Will the core consumer price index (CPI) remain low? Some have analyzed that the current inflation rate is underestimated because the CPI doesn't fully reflect the price changes in the market. What's the PBOC's take on this? Thank you.

Chen Yulu:

Price stability is the core objective of the monetary policy. According to the CPI data released by the National Bureau of Statistics (NBS) on Jan. 11, the year-on-year growth of the CPI in December turned from negative to positive, and 2020's annual CPI expanded 2.5% compared to the previous year. The NBS immediately interpreted this data and noted that the CPI had a relatively high growth rate on a month-on-month basis at the end of 2020, driven by the rise in pork and refined oil products prices. We had another good grain harvest in 2020, and the hog production capacity has basically recovered to the levels seen in previous normal years. Therefore, in the medium and long term, we believe that the possibility of a continuous sharp increase in month-on-month CPI growth is relatively small. Meanwhile, we do need to pay attention to changes to the core CPI. As the growth of personal income recovers, coupled with the recurrence of the epidemic in some locations and service consumption remaining constrained to some extent, the core CPI which excludes food and energy prices remains low.

Next, with China's steady economic recovery and the gradual revival of domestic consumption demand, we believe that the core CPI is expected to continue to rebound. In general, the price level in China will see a moderate rise in 2021. Influenced by the situation during this same period last year, it is predicted that the year-on-year growth of the CPI this year will rise first and then stabilize.

As for the question about whether the CPI should include changes to asset prices, this remains an important topic for academic discussion. None of the major economies in the world has directly included price changes of some specific assets in their CPI. The central bank has kept a close eye on asset prices in important sectors while paying attention to the country's price level. To effectively safeguard financial stability, we have implemented macroprudential policies to guard against macro-financial risks caused by sharp fluctuations in asset prices. Thank you.

Market News International:

I have two questions about the data. The social financing data released by the central bank shows that the figure for bad loan write-offs is different from that given by the China Banking and Insurance Regulatory Commission. Why for this? In addition, what is the approximate proportion of entrusted loans, trust loans, and bill financing - all categorized as social financing - combined in the total shadow banking? Could you please introduce the overall size of China's shadow banking? Thank you.

Chen Yulu:

Thank you. You have studied our data very carefully. Ms. Ruan will answer your questions involving the structured data.

Ruan Jianhong:

Let me start by answering your first question. As you noted, according to data released by the People's Bank of China (PBOC) on aggregate social financing, the volume of loans written off amounted to 764.4 billion yuan in the first three quarters of 2020. During the same period, the disposal of non-performing loans reached 1.7 trillion yuan, according to data released by the China Banking and Insurance Regulatory Commission (CBIRC). The two figures released by different sources do not match exactly, since the former is part of the latter. Apart from write-offs, non-performing loans can be disposed of through other means including transfers, payments-in-kind and securitization.

Regarding your second question, you asked whether the aggregate social financing data includes shadow banking businesses. In fact, entrusted loans and trust loans, which we frequently mention, are not all covered by shadow banking. For example, entrusted loans under the housing provident fund scheme are not shadow banking activities. Current aggregate social financing data show that entrusted loans and trust loans totaled 12 trillion yuan, not including the 5.4 trillion yuan of housing provident fund loans.

Shadow banking refers to activities performed by credit intermediary institutions outside the banking system, which are subject to lower levels of regulatory oversight and higher risks, such as some private equity funds, part of entrusted loans and trust loans, non-standard asset investment by financial products, and so on. The volume of these businesses, after removing double counting, currently stands at about 32 trillion yuan, which is 2 trillion yuan lower than at the end of 2020. Thank you.

Hong Kong's Bauhinia Magazine:

In 2020, financial institutions made 1.5 trillion yuan in interest concessions to boost the real economy. What measures were taken to achieve this? Will you issue new policies to encourage interest concessions by financial institutions in 2021? Thank you.

Chen Yulu:

I would like to invite Mr. Sun Guofeng to answer your questions.

Sun Guofeng:

In 2020, the PBOC fully implemented the decisions and plans of the CPC Central Committee and the State Council. Working together with relevant authorities, we guided the financial system to make 1.5 trillion yuan in interest concessions to boost the real economy. The measures included lowering interest rates, cutting fees, and deferring repayments of principal and interests of loans.

First, we deepened reform on the loan prime rate (LPR) to bring lending rates down further, saving enterprises a total of 590 billion yuan. The one-year LPR fell 30 basis points, lowering the annual lending rate in 2020 by 0.5 percentage points compared with 2019 and saving enterprises 560 billion yuan. Also, we successfully completed LPR switch of outstanding floating interest rate loans by the end of last August, saving enterprises 28 billion yuan by direct interest rate cuts during the switch and falling LPR after repricing.

Second, we offered re-lending and rediscount quotas to support cheaper loans, saving enterprises 46 billion yuan. The PBOC increased re-lending and rediscount quota by 1.8 trillion yuan in three batches, enabling financial institutions to issue loans with competitive interest rates. All the quota had been used by the end of 2020.

Third, the downward trend in bond interest rates has provided approximately 120 billion yuan in profits to bond issuers. Meanwhile, interest rates of newly issued national bonds, local bonds, and corporate credit bonds in 2020 are 0.47 percentage points lower than in 2019.

Fourth, the two direct tools made a profit of 380 billion yuan. Last year, the inclusive small and micro-enterprise loan extension support tool provided 358 billion yuan in profits for enterprises by reducing corporate interest expenditures and bridge costs. The inclusive small and micro-credit loan support program saved 24 billion yuan in guarantee costs for enterprises. The China Banking and Insurance Regulatory Commission has also guided banks to transfer profits by urging them to reduce fees, support corporate restructuring, and make debt-to-equity swaps. These transfers are expected to secure around 420 billion yuan. The total amount of money accrued from the above measures indicates that 1.5 trillion yuan has been successfully transferred to the real economy.

In the next stage, the People's Bank of China will insist on seeking progress while maintaining stability, do well to create cross-cycle policy design, deepen reforms in interest rate marketization, continue to release LPR reforms potential, consolidate achievements via the reduction of real interest rate on loans, and promote the steady decline of corporate financing costs. Thank you.

South China Morning Post:

US President-elect Joe Biden has announced an economic stimulus package of $1.9 trillion. How does the central bank view the possible impact of the new US stimulus package on China's economy and finance? In addition, Chair of the Federal Reserve Jerome Powell recently stated that the US government will not raise interest rates in the short term. Is the central bank worried that long-term external ultra-low interest rates or even negative interest rates will deteriorate China's international financial environment since China is still the only major economy to adopt a normal monetary policy? Thank you.

Chen Yulu:

This question is about the latest update. First, Mr. Sun Guofeng will answer from the perspective of monetary policy operations and then I will elaborate on his answer.

Sun Guofeng:

We understand that a new fiscal stimulus plan in the United States is ready to be introduced, and the global financial market has already responded to this. US inflation expectations have risen and the US treasury bond yields have rebounded sharply. Meanwhile, the US dollar has appreciated against other major currencies and the RMB has also recently depreciated against the US dollar. It should be noted that the RMB exchange rate depreciated in the first half of 2020, then appreciated in the second half of the year. Again, RMB exchange rate has recently depreciated against the US dollar. These fluctuations are normal, indicating that market supply and demand have played a decisive role in the formation of the exchange rate. The flexibility of the RMB exchange rate has increased, risen, and fallen, and two-way floating has become the norm. It has played the role of an automatic macroeconomic stabilizer and has created conditions for the central bank to independently implement normal monetary policies as per China's economic situation. At the same time, we have strengthened international macroeconomic policy coordination. China is the only major economy in the world to achieve positive economic growth in 2020 and it is also one of the few major economies that implement normal monetary policies. It has promoted the recovery of the global economy, which is conducive to the normalization progress of the monetary policy of other major economies in the future. Thanks.

Chen Yulu:

The strict prevention of external financial risks was specially raised at a recent work meeting by the People's Bank of China. The main external financial risks we need to be alert to are the slowing-down of the global economic recovery, the resulting pressure to the real economy, and vulnerability to the financial system. The risks we are facing include: First, decoupling from the basic real economy in the international market and increasing fluctuation. Second, volatility or fluctuations in cross-border capital flow against a background of highly relaxed global liquidity. Third, with the unprecedented impact on the economy caused by the pandemic, low-income countries are confronting a rising debt crisis which may further affect the global economic recovery.

In the face of these three external risks, we will continue to prioritize domestic efforts. First, we will maintain the consistency, stability and sustainability of macro-economic policies, thus laying a solid foundation for China's basic economy. Second, we will improve the financial monitoring system and enhance the ability of macro-prudential management as well as the ability of systematic risk prevention and control. Meanwhile, we will increase coordination of international macro-economic and financial policies via global platforms such as the G20, in a bid to create favorable conditions for a further global economic resurgence. Thank you.

ThePaper.cn:

How should we understand the need for "prudent monetary policy" to be flexible, accurate, reasonable and moderate? And, how should we view the follow-on measures of reducing reserve requirement ratio and interest rates? Thank you.

Chen Yulu:

Sun Guofeng, director general of the Monetary Policy Department of the People's Bank of China, will answer your questions.

Sun Guofeng:

China's economy is back on the right track with a stronger internal driving force and better economic indicators. Due to the COVID-19 pandemic and uncertainties in the external environment, the global economic and financial situation is still complicated and the foundation of economic recovery is still unstable. Our monetary policy should support the real economy while striking a balance between economic recovery and risk prevention. Therefore, China will prioritize stability in its monetary policy in 2021. A prudent monetary policy should be flexible, precise, reasonable, moderate, and sustainable.

China will use a comprehensive range of monetary policy tools, such as reserving requirement ratio, re-lending, and re-discount, medium-term lending facility, and open market operations to maintain liquidity at a reasonably ample level, ensure that the growth of the broad money supply and social financing basically matches nominal economic growth, and make flexible policy adjustments in accordance with changes in the situation.

China will give full play to the "drip irrigation" function of monetary policy tools and step up efforts to effectively support the real economy. On one hand, we will prudently adjust and carry on the emergency policies like the two recent monetary policy tools that aim to boost the real economy. On the other hand, we will innovate and implement new monetary policy tools to provide financial support to scientific innovations, small and micro-sized businesses, and green development.

We will deepen reform of the financial system, continue to promote liberalization of interest and exchange rates, improve the transmission mechanism of monetary policy, and establish a market-based interest rate system. We also aim to promote the steady decline of comprehensive financing costs, deepen LPR reform, maintain a lowered interest rate on loans, improve the flexibility of RMB exchange rate, strengthen the macro and prudent management of cross-border capital flow, stabilize market expectations, establish a "risk-neutral" attitude among businesses and financial organizations, and maintain basic stability in the RMB exchange rate.

You asked a question about the reserve ratio and interest rate. About the interest rate, we should pay more attention to the changes in the real interest rate. Since 2020, the People's Bank of China has adopted reform measures to reduce financing costs for companies, which has proved quite effective.

China's corporate lending rate was 4.61% in December 2020, down 0.51 percentage points year on year, an all-time low and a larger drop than LPR. Furthermore, declining loan interest rates pushed banks to reduce the cost of debt, forcing saving rates to drop. The three-year and five-year weighted average deposit interest rates have dropped to 3.67% and 3.9% respectively, down five and 16 basis points year on year. The current economy has returned to a potential output level, with a strong demand for business loans and a reasonable growth in currency credit, indicating that the current interest rate level is appropriate.

Regarding the reserve requirement ratio, the People's Bank of China lowered the ratio three times in 2020, releasing 1.75 trillion yuan in liquidity. Since 2018, the People's Bank of China has altogether cut the reserve ratio 10 times, releasing a total of 8 trillion yuan in liquidity. Now, the average reserve ratio for all Chinese financial institutions is 9.4%, while for over 4,000 medium- and small-sized financial institutions, the ratio is 6%. Whether compared with other developing countries or compared with China's historical reserve ratio, the current deposit reserve ratio is not high.

Next, the People's Bank of China will adopt a comprehensive range of monetary policy tools to provide short, medium, and long-term liquidity in accordance with the changes in economic and financial situations, maintain liquidity at a reasonably ample level, and ensure that the growth of broad money supply and social financing basically matches nominal economic growth. We will continuously deepen our reform toward a more market-oriented interest rate, maintain the lowered real interest rate in loans, promote the steady decline in corporate financing costs, and provide a sound monetary policy environment for high-quality economic development. Thank you.

Red Star News:

In 2020, China's real economy, especially small and micro-enterprises, has been severely affected by the epidemic. What measures has the PBOC taken to support the development of small and micro-enterprises? What is the next step? Thank you.

Chen Yulu:

Thank you for bringing up this important issue. Supporting the stable development of small and micro-enterprises is a focus of PBOC and the financial system. As you mentioned, the COVID-19 has made life harder for small and micro-enterprises in 2020. Small and micro-enterprises are key market entities as we stabilize enterprises and ensure employment. The PBOC has resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council and promptly introduced policy measures in four aspects, in coordination with relevant ministries, to firmly support the financing and stable development of small and micro-enterprises. Generally speaking:

First, we have innovated two monetary policy instruments to channel funds into the real economy. Last June, we introduced a policy to allow small and micro-enterprises to postpone principal and interest repayments on loans and rolled out a credit loan support program. These two instruments, funded by the PBOC, encouraged banks to defer payments on all-inclusive loans for small and micro-enterprises eligible for the policy accordingly and substantially increase credit loans. In the past year, the banking industry deferred on principal and interest payments totaling 7.3 trillion yuan and issued 3.9 trillion yuan in inclusive credit loans to small and micro-enterprises, an increase of 1.6 trillion yuan from the same period last year.

Second, we have built up preferential policy support for small and micro-enterprises in key areas. We have led efforts to introduce 30 measures to help fight the epidemic in the financial sector, set up a special re-loan project of 300 billion yuan for epidemic prevention and control, and bolstered support targeting more than 7,600 key enterprises in charge of epidemic prevention and supply delivery, most of which are SMEs. Per the needs of epidemic prevention and control, we have launched further re-lending and re-discount quotas of up to 500 billion yuan for the resumption of work and production and increased inclusive re-lending and re-discount quota by one trillion yuan. More than 600,000 companies affected by the COVID-19 received financial support, most of which are also micro-, small and medium-sized enterprises (MSMEs).

Third, we have enhanced commercial banks' capabilities in providing financial services for micro- and small businesses. The PBOC has actively urged commercial banks to improve their resource allocation and performance evaluation mechanisms for small and micro-enterprises and increase the weight of inclusive finance for commercial banks to more than 10%. Credit loans, first-time loans, and loan renewals without repayment of the principal have been substantially increased. Among the newly granted inclusive credit loans for inclusive small and micro-businesses in the first 11 months of last year, nearly 40% of the enterprises were granted for the first time.

Fourth, we have followed a cohesive policy to improve monetary, regulatory, fiscal and taxation, and other external policy incentives. We have worked to play a better role as a government financing guarantee institution and improve local risk-sharing and compensation mechanisms. We have implemented comprehensive policies to improve financial services for small and micro-enterprises. At the same time, we have also actively promoted the construction of enterprise credit information sharing platforms to promote the sharing of credit information among small and micro-enterprises. The accounts receivable financing platform operated by the PBOC's Credit Reference Center offered 2 trillion-yuan fund loans for MSMEs throughout the year, exceeding the annual target of 800 billion yuan.

Overall, we did a good job in financing small and micro-enterprises last year by increasing loans to more enterprises and reducing costs. By the end of last year, outstanding loans issued to small businesses under inclusive finance services stood at 15.1 trillion, up 30% year on year. Interest rates for newly granted loans to small and micro-enterprises in December were 5.08%, down 0.8 percentage points from the same period last year. In 2020, a total of 32.28 million businesses were supported, an increase of 5.24 million from the previous year.

Next, the PBOC will maintain the continuity, stability, and sustainability of policies in accordance with the deployment of the Central Economic Work Conference, continue to make good use of structural monetary policy instruments and targeted credit policies and give full play to the national accounts receivable financing platform and unified registration for pledges of movable assets and rights. This way, we will continue to strengthen support for small and micro-enterprises. Thank you.

Shou Xiaoli:

Thank you, Mr. Chen, and all the other speakers. Thanks to friends from the media. Today's SCIO press conference is hereby concluded. I wish you all a happy weekend!

Translated and edited by Liu Sitong, Zhou Jing, Liu Jianing, Cui Can, Zhang Junmian, Li Xiao, Wang Zhiyong, Zhang Rui, Fan Junmei, Zhang Tingting, Guo Yiming, Wang Yiming, Li Huiru, He Shan, Gong Yingchun, Wang Qian, Zhang Liying, Wang Wei, Xu Xiaoxuan, David Ball, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speaker:

Li Kuiwen, spokesperson and director of the Department of Statistics & Analysis of the General Administration of Customs

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date: 

Jan. 14, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference from the State Council Information Office (SCIO). This is a routine press conference on China's annual economic standing. Today, we are delighted to be joined by Mr. Li Kuiwen, spokesperson and director of the Department of Statistics & Analysis of the General Administration of Customs, who will introduce China's import and export performance of 2020 and answer your questions.

Now, let's give the floor to Mr. Li.

Li Kuiwen:

Ladies and gentlemen, friends from the media, good morning. It's a great pleasure to meet with you. I'll begin by introducing China's import and export performance of 2020, and then answer your questions.

In 2020, China faced a grave and complex domestic and international landscape and a severe economic impact posed by COVID-19. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China was the only major economy to realize positive economic growth last year, with its foreign trade exceeding expectations and registering a historical high. According to statistics from the General Administration of Customs of the People's Republic of China (GACC), China's total foreign trade of goods expanded 1.9% year on year to 32.16 trillion yuan (about 4.97 trillion U.S. dollars) in 2020. Exports grew by 4% to 17.93 trillion yuan, while imports declined by 0.7% to 14.23 trillion yuan. The trade surplus increased by 27.4% to 3.7 trillion yuan. There are six main reasons for these changes:

Li Kuiwen:

First, foreign trade reached a historical high. The global economy and trade have taken strong hits in 2020 and China faced a severely complex external environment for foreign trade. In spite of these challenges, China's foreign trade has rapidly rebounded and steadily grown, displaying its great resilience and comprehensive competitiveness. From June 2020, China registered positive growth in foreign trade for seven consecutive months and hit a record high in total foreign trade volume, exports, and the international market share, becoming the only major economy with positive growth in trade of goods last year. China's role as the world's largest trader in goods has been further consolidated. According to data from the World Trade Organization (WTO) and countries around the world, China's exports, imports, and the two combined in the first ten months of 2020 accounted for 14.2%, 11.5%, and 12.8% of the international market, respectively, all reaching historical highs.

Second, foreign trade entities have been further energized. In 2020, China has 531,000 enterprises with exports' and imports' record, an increase of 6.2% year on year. Meanwhile, China's private sector registered 14.98 trillion yuan in imports and exports, an increase of 11.1%, accounting for 46.6% of the country's total foreign trade volume and 3.9 percentage points higher than the previous year. The private sector played an important part in stabilizing foreign trade, further consolidating its role as the biggest foreign trade entity. Foreign-invested enterprises marked 12.44 trillion in foreign trade, making up 38.7% of the country's total foreign trade volume. State-owned enterprises accumulated 4.61 trillion yuan in imports and exports, accounting for 14.3% of all foreign trade.

Third, our trading partners are diversifying. In 2020, China's trade with its five major trading partners, namely, ASEAN, European Union, the United States, Japan, and South Korea, reached 4.74 trillion yuan, 4.5 trillion yuan, 4.06 trillion yuan, 2.2 trillion yuan, and 1.97 trillion yuan, up by 7%, 5.3%, 8.8%, 1.2%, and 0.7%, respectively. In addition, trade with countries along the Belt and Road reached 9.37 trillion yuan, up 1%.

Fourth, trade modes have been continuously optimized. In 2020, China's general trade increased by 3.4% to 19.25 trillion yuan, accounting for 59.9% of China's total foreign trade volume, 0.9 percentage points higher than the previous year. Exports grew by 6.9% to 10.65 trillion yuan, while imports fell by 0.7% to 8.6 trillion yuan. Processing trade dropped by 3.9% to 7.64 trillion yuan, accounting for 23.8% of the total foreign trade volume.

Fifth, exports of traditionally competitive products maintained growth. In 2020, China's exports of electromechanical products increased by 6% to 10.66 trillion yuan, making up 59.4% of the country's total exports, and increasing 1.1 percentage year on year. Exports of laptops, home appliances, and medical equipment went up by 20.4%, 24.2%, and 41.5%, respectively. At the same time, exports of seven types of labor-intensive products including textiles and clothes rose by 6.2% to 3.58 trillion yuan. Exports of textile products including face masks surged by 30.4% to 1.07 trillion yuan.

Sixth, exports of anti-epidemic supplies provided strong support for the global combat against COVID-19. China has been playing its part as the world's largest supplier of anti-epidemic materials by proactively carrying out international cooperation to fight against the COVID-19 pandemic, and making the utmost efforts to provide and export anti-epidemic materials to over 200 countries and regions. From March to December 2020, customs authorities across China cleared major anti-epidemic supplies worth 438.5 billion yuan, showing China's commitment as a responsible major player in the fight against COVID-19 worldwide. Meanwhile, exports of products in the "stay-at-home economy," such as laptops, grew by 8.5% to 2.51 trillion yuan, meeting the needs of people across the globe living and working at home during the pandemic.

Li Kuiwen:

In 2020, China made outstanding achievements in foreign trade, which did not come easily amid unprecedented challenges and difficulties. This is the result of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, which speaks volumes of the resilience and vitality of China's foreign trade. China customs also played its part with relentless efforts. Over the past year, we firmly implemented the decisions and plans of the CPC Central Committee and the State Council; carried out the work in a timely and pragmatic manner; stabilized foreign trade growth by introducing a number of policies while preventing and controlling the cross-border spread of COVID-19, and; strengthened supervision efforts and improved services to ensure stable and high-quality foreign trade.

In 2021, the world faces further uncertainties brought about by the pandemic and global landscape. The global economic situation is still grave and complex, posing uncertainties and instabilities to foreign trade growth. China customs will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the spirit of the 19th National Congress of the CPC, the 2nd, 3rd, 4th, and 5th plenary session of the 19th Central Committee of the CPC and the Central Economic Work Conference, and adhere to the principle of seeking progress while ensuring stability. China customs will stick to its new development philosophy and foster a new development paradigm in the new development stage, maintain security in the six areas in order to ensure stability on the six fronts, strengthen supervision efforts and improve services, and continuously optimize the business environment at ports to strive for higher-level opening-up and quality development of foreign trade. GACC will contribute to a good start of the 14th Five-Year Plan (2021-2025) in the development of foreign trade and commemorate the 100th anniversary of the founding of the CPC via great achievements.

Next, I'll be answering your questions.

Shou Xiaoli:

Thank you, Mr. Li. Now the floor is open to questions. Please identify your news outlet before raising questions.

CCTV:

My questions are: What are the main reasons for the growth of China's foreign trade amid the COVID-19 outbreaks in 2020? What do you think of China's foreign trade last year in general? What are your predictions for trends in 2021? I would like to hear your insights. Thank you.

Li Kuiwen:

Thank you for your questions. The CPC Central Committee and the State Council pay great attention to stabilizing foreign trade. General Secretary Xi Jinping advised stabilizing the fundamentals of foreign trade and foreign investment, ensuring smooth operation of foreign trade industrial chains and supply chains, and stabilizing China's international market share. Last year was unusual in the sense that though we were faced with a grave and complex domestic and international landscape and the severe impact posed by COVID-19, China was the only major economy to experience positive growth in trade of goods and exceeded expectations regarding foreign trade overall. This demonstrates great resilience and competitiveness in China's foreign trade and we can say that China achieved stable and high-quality foreign trade.

"Stability" was reflected in three ways. First, a record high in total foreign trade volume and international market share. China saw its foreign trade stabilize quickly after substantial fluctuations in the first quarter of 2020. The trade volume registered a new high in each successive quarter, with the year's total volume reaching a record high of 32 trillion yuan, a figure was attained amid dramatically shrinking global trade. The international market share also registered a record high thanks to the unusual growth of foreign trade. As I just mentioned, the WHO's statistics on monthly trade in goods of major economies showed that China's exports, imports, and the two combined accounted for 14.2%, 11.5%, and 12.8% of the international market in the first 10 months of 2020, 0.4, 0.7, and 0.8 percentage points higher than previous records, respectively. Therefore, China's role as the world's largest trader in goods has been further consolidated.

Second, exports have been driven by an increased need for anti-epidemic supplies and products for the "stay-at-home economy." As China brought COVID-19 under effective control and resumed work and production, the country saw its exports rebound in April and maintain growth ever since. With a much higher demand for anti-epidemic materials and products for the "stay-at-home economy" globally, China's exports of textile products (face masks included), medical equipment, and medicine surged by 31%, contributing to a 1.9-percentage-point increase in overall exports. China's exports of laptops, tablet computers, and home appliances rose by 22.1%, increasing overall exports by 1.3 percentage point. Those exported goods met the anti-epidemic needs of countries worldwide as well as those people across the globe living and working at home during the pandemic.

Third, there was a huge boost to imports in the domestic market. China's huge domestic market showed a more prominent advantage in stabilizing imports amid the pandemic. In 2020, in terms of resource products, China imported 7.3% more crude oil and 7% more metal ore, while in terms of agricultural products, China imported 28% and 60.4% more grain and meat, respectively.

Those are the three aspects that reflect "stable" foreign trade.

"Quality improvement" was also demonstrated in three ways. First, through an improved foreign trade structure. Trade growth among private companies in China was 9.2 percentage points higher than the country's overall level in 2020, becoming a major driving force in China's foreign trade. General trade saw year-on-year growth of 0.9% in 2020. The country also saw a more balanced foreign trade development among various regions. With new progress made in transferring industries from eastern China to western and central China, the western and central regions saw their trade increase by 11%, accounting for 17.5% of the country's total and 1.4 percentage points higher than the previous year.

Second, there was an even higher driving force for foreign trade development. As new modes of foreign trade prospered, the trade volume of cross-border e-commerce registered at 1.69 trillion yuan, up by 31.1%, and exports based on procurement from markets increased by 25.2%. China ran 12,400 China-Europe freight trains throughout the year and delivered 1.14 million TEUs, up by 50% and 56% year-on year, respectively. The combined heavy container rate was up to 98.4%.

Third, a higher level of opening up has played a leading role. The trade volume of comprehensive bonded areas and free trade areas increased by 17.4% and 10.7%, respectively. Imports of duty-free goods at Hainan Free Trade Port rose by 80.5%.

The above is my evaluation of the performance of foreign trade imports and exports throughout the year.

As for this year, in my opinion, the global economy is expected to recover and drive trade growth, and the restoration of the Chinese economy's stable growth will help support foreign trade. However, we must also understand that many uncertainties brought about by the pandemic in the external environment remain, and therefore, so too will difficulties and challenges in foreign trade. The new development pattern, in which domestic and foreign markets reinforce each other, with the domestic market as the mainstay, is now taking shape in China at a higher speed. The country is also promoting a higher level of opening up and developing new advantages in international cooperation and competition. Thus, I believe China is expected to maintain its foreign trade growth in 2021 and make fresh progress in its high-quality development.

Red Star News:

Facing the current severe global epidemic situation, what measures has China Customs taken to prevent the virus from being imported via cold chain food products? How has the effect been so far? Thank you. 

Li Kuiwen: 

I want to add that the latest relevant data we just released has been published on the GACC website simultaneously. We wish to share it with you all.

Thank you for your question. The GACC has resolutely implemented General Secretary Xi Jinping's important instructions on inspection and quarantine of imported cold chain food. Acting strictly in accordance with the general arrangements of the Joint Prevention and Control Mechanism of the State Council, customs has tightened inspections of imported frozen food products to prevent the spread of COVID-19 via cold chains. We have mainly taken measures in four aspects:

First, we have strengthened source management. We have enhanced communication and consultation with the relevant administrations of exporting countries, and required them to supervise the exporting of food to China according to regulatory guidelines released by the FAO and the WHO. They must see to it that food exporters strictly implement the guidelines for food companies by the FAO and the WHO, so as to ensure their exports and packaging are not contaminated by the virus at all levels of procedure, including production, processing, storage, and transportation. We have also informed the exporting countries' administrations of the two guidelines stipulated by China's National Health Commission, namely Technical Guideline for COVID-19 Prevention and Control in Cold Chain Food Production and Operation and Technical Guideline for the Prevention, Control and Disinfection of COVID-19 in Cold Chain Food Production and Operation Processes. We have urged and kept track of those enterprises exporting food to China to implement the two technical guidelines, and taken preventive and control measures in time. Currently, we have suspended imports from 124 cold chain food companies in 21 countries whose employees have been infected with COVID-19. Among them, 107 voluntarily suspended their exports to China after the epidemic outbreak. 

Second, we have reinforced risk monitoring procedures for the virus in imported cold chain food. We have conducted nucleic acid sample testing of imported cold chain food, especially imported seafood. By Jan.13, customs across China have tested a total of 1,295,692 samples, with 47 positive results. 

Third, we have implemented emergent preventive measures after finding positive samples. The GACC will temporarily stop import declarations of any overseas food production enterprises found to have positive samples for one to four weeks. We have now adopted such emergent preventive measures against 39 overseas food production and operation facilities. 

Fourth, we have conducted preventive disinfection work at ports across China. In accordance with the work plan on preventive and thorough disinfection of imported cold chain food released by the Joint Prevention and Control Mechanism of the State Council, we have carried out stringent disinfection of cold-chain food imports at ports of entry, and intensified cooperation with relevant departments to prevent the transmission of COVID-19 through imported cold-chain food. As of Jan. 13, ports across the country have disinfected 13,170,000 outer packages of imported cold chain food for prevention purposes.

Thank you. 

CRI:

Last November, China signed the Regional Comprehensive Economic Partnership (RCEP) agreement. Could you please describe imports and exports between China and RCEP countries last year? In addition, did the GACC make any preparations before the agreement came into effect? Thank you.

Li Kuiwen:

Thank you for your questions. Let me first brief you on the trade between China and other RCEP countries.

In 2020, the total value of China's imports and exports to the other 14 RCEP countries was 10.2 trillion yuan, climbing 3.5% year-on-year and accounting for 31.7% of China's total imports and exports during the same period. Exports accounted for 4.83 trillion yuan, an increase of 5%, while imports totaled 5.37 trillion yuan, an increase of 2.2%. Here are the details:

In terms of trading partners, ASEAN has become China's largest trading partner, with an import and export value reaching 4.74 trillion yuan, an increase of 7%. Japan and South Korea are China's fourth and fifth largest trading partners, with imports and exports reaching 2.2 trillion yuan and 1.97 trillion yuan, an increase of 1.2% and 0.7%, respectively. Meanwhile, imports and exports to Australia reached 1.17 trillion yuan, a decrease of 0.1%, and imports and exports to New Zealand hit 125.53 billion yuan, a decrease of 0.4%.

In terms of exported goods, exports of electromechanical products reached 2.6 trillion yuan, an increase of 7.3%, accounting for 53.8% of the total value of exports to RCEP countries during the same period. Among them, exports of integrated circuits accounted for 314.03 billion yuan, increasing 15%, and automatic data processing equipment and their parts and components were 260.63 billion yuan, an increase of 11.1%. During the same period, the export of labor-intensive products amounted to 944.8 billion yuan, an increase of 11.9%.

In terms of imported goods, imports of integrated circuits were 1.08 trillion yuan, up 9.8%; automatic data processing equipment and their parts and components were 178.45 billion yuan, up 8%; imports of iron ore were 496.35 billion yuan, an increase of 14.7%, and; plastics in primary forms were 156.33 billion yuan, down 0.3%.

As to your second question, RCEP is now the world's largest free-trade zone, encompassing approximately one-third of the world's population and 30% of the global GDP and trade. Member countries see stellar prospects for the RCEP. The GACC has been fulfilling its duties and accelerating relevant preparatory work before the implementation of the RCEP.

First, the GACC has strengthened the organization and leadership. Fully implementing the deployment of the Party Central Committee and the State Council, the GACC quickly established a leading group for RCEP implementation and organized experts in relevant fields to form a number of special working subgroups to oversee different affairs such as tariffs, to accelerate preparations for RCEP implementation.

Secondly, the GACC has worked to establish rules and regulations to ensure that the RCEP Rules of Origin (ROO) are implemented. The GACC is preparing to promulgate measures for the administration of the origin of RCEP imported and exported goods and measures for the administration of approved exporters, optimize processes for declaring preferential import and export visas under the RCEP, and build a supporting information system to make it easy for companies to do so. 

Thirdly, the GACC has increased its training and guided companies to make full use of the RCEP's preferential policies. According to the provisions of the ROO, the optional scope of capital goods for companies has been greatly expanded and multiple types of benefits have been provided for them. The GACC will increase efforts to make the policies known to the companies and help them understand tariff reduction and preferential rules and make sure the companies get the most out of these benefits. At the same time, given the difficulties that may arise during the implementation of RCEP, we have increased research and training and will prepare in advance to better serve the companies. Thank you.

National Business Daily:

The "stay-at-home economy" played an important role in last year's exports. Will this economy continue to drive export growth in 2021? In addition, what new measures will the General Administration of Customs (GACC) take next to promote the high-quality development of foreign trade? Thank you.

Li Kuiwen:

Thank you for your question. Regarding the first question, well, anti-epidemic supplies and products of the "stay-at-home economy" indeed constituted a significant driver for foreign trade development last year. Here, I would like to brief you on the latest data for the export of our anti-epidemic materials.

Statistics show that from March to the end of last year, the GACC cleared 438.5 billion yuan's worth of major anti-epidemic supplies. Regarding face masks, which attracted the most public attention, China exported 224.2 billion of them, with a value of 340 billion yuan, which is equivalent to providing nearly 40 face masks for every individual in the world outside of China. The exported masks included 65 billion surgical masks, nearly 30% of the total. We also exported 2.31 billion protective suits, including 773 million for medical use, 289 million pairs of goggles, and 2.92 billion pairs of surgical gloves. These products have provided a guarantee for medical personnel and other epidemic prevention and control workers to protect themselves.

In terms of medical equipment, we exported 271,000 ventilators, of which 212,000 were non-invasive, as well as 663,000 patient monitors and 119 million infrared thermometers. In addition, 1.08 billion novel coronavirus testing kits were exported, providing support for virus detection work.

We have taken the advantage of being the first country to fully resume work and production and the largest supplier of anti-epidemic materials worldwide. While meeting the domestic needs for epidemic prevention and control, we have exported anti-pandemic materials to most countries and regions in the world, giving strong support to the global fight against the COVID-19 epidemic.

Just now I introduced some data in regard to products of the "stay-at-home economy."

Customs offices also adopted some measures to supervise and serve the development of foreign trade. We have firmly implemented the arrangements of the CPC Central Committee and the State Council and concentrated on ensuring stability on the six fronts (employment, finance, foreign trade, inbound investment, domestic investment, and market expectations) and guarantee in the six areas (jobs, daily living needs, food and energy, industrial and supply chains, the interests of market players, and the smooth functioning of grassroots government), coordinating the epidemic prevention and control at ports and the promotion of stable growth of foreign trade. In July, we held a national customs teleconference on stabilizing foreign trade and foreign investment and launched 56 relevant measures to constantly facilitate customs clearance and ensure the smooth circulation of both domestic and international trade movements. There are four main aspects to these measures:

First, the business environment at ports has continuously been optimized. We have comprehensively taken measures such as the "two-step declaration," "advance declaration," "green channels," and non-physical presence of sender or receiver during customs cargo examination to improve customs clearance efficiency. Last December, the overall customs clearance time for imports and exports nationwide registered 34.91 hours and 1.78 hours, respectively, down by 64.2% and 85.5% from 2017.

Second, costs for enterprises have been further reduced. We have vigorously rolled out pilot Tariff Guarantee Insurance, with 3,509 participating businesses and guaranteed taxes reaching 377.6 billion yuan. Of the participants, nearly 80% were small and medium-sized enterprises (SMEs), effectively mitigating difficulties in accessing affordable financing for various enterprises, especially SMEs.

Third, the development of new trade forms has been promoted. We have comprehensively advanced the regulatory measures for cross-border e-commerce product returns and launched trials for cross-border e-commerce business-to-business (B2B) exports. We encouraged the central, western, and northeast regions of China to carry out trials on market procurement trade. In 2020, imports and exports for China's cross-border e-commerce increased by 31.1%, and market procurement exports by 25.2%, becoming an important stabilizer for foreign trade.

Fourth, new pacesetters for opening-up have been developed. Vigorous support has been given to build the Hainan free-trade port and Yangshan Special Comprehensive Bonded Zone. Between July 1, 2020, and Dec. 31, 2020, the customs agencies supervised duty-free sales of 19.99 billion yuan's worth of goods, with a year-on-year growth of 191.6%. We have stepped up efforts to innovate customs supervision systems in pilot free-trade zones and replicate those measures proven to be effective in pilot free-trade zones elsewhere. We have promoted the implementation of global maintenance and remanufacturing operations in the comprehensive bonded zones. In 2020, the import and export volume of China's comprehensive bonded zones totaled 3.43 trillion yuan, an increase of 17.4%, and 15.5 percentage points higher than the overall growth of foreign trade.

In the next step, customs offices in the country will intensify efforts to implement the existing measures, strive to succeed in the "last mile" of policy implementation, and make every effort to promote the high-quality development of foreign trade and investment. Thank you.

Bloomberg News:

According to the data you have just released, the trade surplus in China exceeded $500 billion last year, the highest figure since 2015. Do you think trade surplus will continue to grow or do you think the demand for imports in the country will increase in 2021? Please give us a brief analysis, thank you.

Li Kuiwen:

Thank you for your question. Actually, I already answered this question when discussing trends in this year's foreign trade just now. Regarding the overall development of foreign trade in 2021, I think that the world economy is expected to recover and the domestic economy will provide strong support for foreign trade. However, we should also be aware that changes in the pandemic situation and the external environment will both bring difficulties and challenges to the development of our country's foreign trade. Thanks to the advantages of the large domestic market, the gradual formation of a new pattern of development, and the continuous promotion of high-level opening-up, I believe that foreign trade this year is expected to maintain certain growth. But we still need to further observe factors related to this issue. Thank you.

China News Service:

I would like to ask what measures customs have taken to ensure stability on six fronts and maintain security in six areas to promote the high-quality development of foreign trade as well as expand high-level opening up? Thank you.

Li Kuiwen:

I have already discussed the relevant measures taken by customs when answering previous questions, thank you.

The Paper:

With the recovery of China's productivity supply capacity, many foreign trade enterprises experienced a situation where demand exceeded supply at the end of 2020. This year, will China's exports still perform better than imports? Thank you.

Li Kuiwen:

Thank you for your question. Just now, I have answered a relevant question about the trend of foreign trade this year. Generally speaking, knowing whether China's exports will continue to outperform imports requires further observation of the global economy and trade situation. Thus, we will continue to observe and pay close attention to this issue. Thank you.

South China Morning Post:

I have two questions. First, according to the China-U.S. phase-one economic and trade agreement, China promised to import no less than $63.9 billion in additional goods in 2020 from the base of 2017. How did that go last year according to China's data? And what changes have occurred in procurement from the U.S. in the context of the U.S. presidential election and the current pandemic situation? Second, could you please provide some specific data on trade between China and Australia, including the December figures for coal, iron ore and liquefied natural gas imports from Australia? Has China already set coal import quotas for 2021, and will the ban on Australian coal imports be adjusted? In addition, after lifting a ban on scrap steel imports on Jan. 1 this year, will China reduce its iron ore imports from Australia? Thank you. 

Li Kuiwen:

Thank you for your questions. Let me start by answering the first question. In terms of China-U.S. trade, I would like to brief you on the relevant data.

In 2020, the total value of China-U.S. bilateral trade in goods was 4.06 trillion yuan, an increase of 8.8%, accounting for 12.6% of China's total imports and exports during the period. Of this, exports to the U.S. reached 3.13 trillion yuan, an increase of 8.4%, while imports from the U.S. reached 931.87 billion yuan, an increase of 10.1%. In terms of exports, in 2020, China's exports of mechanical and electrical products to the U.S. reached 1.92 trillion yuan, an increase of 9%, accounting for 61.4% of the total exports to the U.S. in the same period. Of this, the export of laptops and cellphones increased by 23.4% and 4.6% respectively. During the same period, the export of labor-intensive products increased by 9.8%, and the export of pharmaceutical materials and drugs increased by 30.7%.

In terms of imports, in 2020, China's imports of agricultural products from the U.S. reached 162.74 billion yuan, an increase of 66.9%. Imports of soybeans, pork, cotton and crude oil grew by 56.3%, 223.8%, 121.7% and 88%, respectively. In addition, the import of automobiles was 60.01 billion yuan, down 4.1%.

As for your concerns about the implementation of the China-U.S. phase-one economic and trade agreement and the latest China-U.S. economic and trade trends, the relevant departments have already issued statements, and I will not repeat them here.

Regarding your second question, about Sino-Australian trade, let me first update you on trade between China and Australia.

In 2020, the total imports and exports between China and Australia reached 1.17 trillion yuan, down 0.1%. Of this, exports to Australia amounted to 370.23 billion yuan, up 11.2%, while imports from Australia were 796.35 billion yuan, down 4.6%. In terms of trading commodities, China's main export commodities to Australia in 2020 were mechanical and electrical products and labor-intensive products, accounting for 76.1% of its total exports to the country. The main commodities imported from Australia were iron ore and natural gas, which accounted for 70.6% of the total imports.

For other information on Sino-Australian trade, please consult the relevant authorities. Thank you.

Shou Xiaoli:

Now for the last two questions.

CRNTT:

Hello, Mr. Li, just now you mentioned that new foreign trade formats such as cross-border e-commerce and the market procurement trade flourished in 2020. Could you please give us a detailed account of the development of the new format and the foreign trade model over the past year and its role in promoting the quality and efficiency of China's foreign trade? Thank you.

Li Kuiwen:

Thank you for your question. Last year, under the influence of the pandemic, cross-border e-commerce as a new business format achieved rapid development. As an emerging format of trade, cross-border e-commerce has shown positive growth during the pandemic period, and has become an important force in stabilizing foreign trade. China Customs has been actively adapting to and promoting the development of cross-border e-commerce, continuously innovating and optimizing the regulatory system, and supporting the orderly development of new business forms like this. The measures we have taken are:

The first is to comprehensively promote supervision measures for the return of cross-border e-commerce export commodities, optimize e-commerce retail import return measures, solve the problem of difficult returns of export commodities, and fully support enterprises to sell goods to the world. We have also optimized cross-border e-commerce retail import return measures, helped businesses overcome the impact of logistics delays caused by the pandemic, and assisted to improve their after-sales service systems.

The second is to carry out innovative cross-border e-commerce B2B export pilot programs. We have added "9710" and "9810" trade methods, which refer to either direct export of goods from domestic businesses to overseas businesses by cross-border logistics based on their mutual deals over a cross-border e-commerce platform, or the export of goods by a domestic company to its overseas warehouse, from which the goods will be delivered to overseas buyers based on their deals over a cross-border e-commerce platform. We have now launched pilot programs in 22 directly-affiliated customs offices, including in Beijing. We have promoted cross-border e-commerce regulatory innovations from B2C to B2B, with supporting measures to facilitate customs clearance. Pilot enterprises can apply for clearance facilitation measures such as "one-off registration, streamlined declarations, and expedited clearance at lower costs, prior inspection, customs transit, and convenient return."

The third is to expand and clear cross-border e-commerce logistics channels. Affected by the pandemic, international flights were suspended and significantly reduced last year, and the traditional shipping capacity plummeted. The General Administration of Customs promptly issued ten measures to support the development of the China-Europe Railway Express and support its use to carry out cross-border e-commerce, mail, and other transportation services. During the pandemic, customs supported the postal department to open temporary entry and exit postal routes, creating a total of 15 temporary exit ports and 13 temporary entry ports, actively distributing inbound and outbound mail and cross-border e-commerce commodities, and striving to ensure the stability of industrial and supply chains.

The fourth is to make every effort to ensure the orderly customs clearance of cross-border e-commerce commodities during business peak periods such as the "Double 11 Shopping Day." In 2020, cross-border e-commerce grew rapidly, and the import and export lists checked and released through the customs cross-border e-commerce management platform hit 2.45 billion, surging by 63.3% year-on-year. During the "Double 11" period in 2020, 52.27 million import and export lists were processed through the customs cross-border e-commerce unified import and export system, an increase of 25.5% on the previous year. Meanwhile, the processing peak reached 3,407 items per second, an increase of 113.2% year-on-year. All indicators reached new highs.

The fifth is to perfect cross-border e-commerce statistics. In order to fully reflect the overall import and export situation of cross-border e-commerce, the General Administration of Customs has made full use of China's E-commerce Law and the definition of cross-border e-commerce by the World Customs Organization to explore and establish a cross-border e-commerce statistical system. According to preliminary statistics, China's cross-border e-commerce imports and exports in 2020 were 1.69 trillion yuan, an increase of 31.1%, of which exports made up 1.12 trillion yuan, an increase of 40.1%, and imports were 0.57 trillion yuan, an increase of 16.5%.

In the next step, customs will continue to focus on the development of new formats and the concerns of enterprises, continue to strengthen supervision, optimize services, further improve supervision and statistical systems, and continuously promote the high-quality development of new formats of cross-border e-commerce. Thanks.

dzwww.com:

We noticed that the private sector has become the largest contributor to China's foreign trade growth. What were the characteristics of import and export for Chinese private businesses in 2020? What new measures will the General Administration of Customs (GAC) introduce to support private businesses in foreign trade? Thank you.

Li Kuiwen:

Thank you for the questions. As I said just now, the private sector has become the largest foreign trade entity in China. In 2020, China's private sector registered 14.98 trillion yuan in imports and exports, an increase of 11.1%, accounting for 46.6% of the country's total foreign trade volume, 3.9 percentage points higher than the previous year. Specifically, exports of the sector grew by 12.3% year-on-year to 9.99 trillion yuan, while imports increased by 8.8% to 4.99 trillion yuan. The main highlights are as follows:

First, the private sector showed greater resilience in foreign trade. In the face of the unexpected COVID-19 epidemic, private businesses rose to the challenge and made full use of their flexibility to explore the international market, showing greater resilience in foreign trade. The annual growth rate of foreign trade and exports in the private sector was 9.2 and 8.3 percentage points higher than that of the country's total volume, respectively. Imports in the sector increased by 8.8% last year, while the country's imports declined by 0.7%.

Second, the development of private businesses in different regions became increasingly coordinated. In 2020, the imports and exports of private businesses in central and western regions grew by 15.9%, 5.6 percentage points higher than in the eastern regions. Nine out of the top 10 provinces with the highest foreign trade growth rates in the private sector are from China's central and western regions. Guizhou and Yunnan occupied the top two positions.

Third, private businesses made more efforts to expand their market. In 2020, private sector exports to the EU, the US, Japan, South Korea, among other traditional markets, grew by 14.9%, 23.4%, 12.9%, and 18.6%, respectively, and exports to the ASEAN increased by 15.1%, all recording double-digit growth.

To support the development of the private sector, the GAC will continue to implement decisions and plans made by the CPC Central Committee and the State Council and work to create a favorable environment for the development of foreign trade in the private sector. We will take measures in three major aspects:

First, improve the efficiency of customs clearance and optimize the business environment at ports. We promote the practice of "declaring import and export goods in advance," upgrade the "two-step" declaration process, and improve the "two-stage access supervision." We further streamline customs clearance procedures, reduce the time of cargo clearance, and lower related costs for enterprises.

Second, earnestly implement every measure to cut taxes and fees. We release preferential tax policies in a timely manner and offer more detailed interpretations to ensure enterprises benefit from the policies. For those enterprises that fall behind with their taxes due to the impact of COVID-19, we extend payment deadlines and exempt or reduce overdue fines. We suspend interest on deferred tax for domestic sales of trade processing enterprises and expand the pilot policy of selective tariffs on domestic sales.

Third, carry out in-depth research and studies in enterprises and offer targeted support. We give full play to the role of the customs service hotline 12360, our online survey system, the WeChat platform for credit management, and coordinators between customs offices and enterprises. By using all of these channels, we aim to better understand the needs and difficulties of enterprises and do our best to offer them targeted assistance regarding tax payments, credit management, and customs clearance, etc.

In the next step, we will continue to work in line with the requirements ordered by the central government on ensuring stability on the six fronts and security in the six areas and introduce a larger number of more targeted policies to support the development of private businesses.

Shou Xiaoli:

In the coming days, we will hold a series of briefings on China's economic performance in 2020, and we welcome your attendance. Today's briefing is hereby concluded. Thank you.

Translated and edited by Zhu Bochen, Li Huiru, Zhang Jiaqi, Zhang Rui, Liu Jianing, Zhang Junmian, Wang Yiming, Yang Xi, Xu Xiaoxuan, Huang Shan, Wang Qian, Lin Liyao, Wang Wei, Xiang Bin, Yuan Fang, Zhang Liying, Wang Zhiyong, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese 

Speakers:

Xu Nanping, vice minister of science and technology

Zeng Yixin, vice minister of the National Health Commission, and director of the vaccine R&D working group under the State Council's inter-agency task force

Chen Shifei, deputy commissioner of the National Medical Products Administration

Shen Bo, a person in charge of the Department of International Organizations and Conferences of the Ministry of Foreign Affairs

Mao Junfeng, a person in charge of the Consumer Products Industry Department of the Ministry of Industry and Information Technology

Zheng Zhongwei, head of the vaccine R&D working group under the State Council's inter-agency task force

Wu Yonglin, president of China National Biotec Group (CNBG) affiliated with China National Pharmaceutical Group Co., Ltd. (Sinopharm)

Chairperson:

Hu Kaihong, spokesperson for the State Council Information Office

Date:

Dec. 31, 2020

Hu Kaihong:

Good morning, ladies and gentlemen. Welcome to this press conference held by the State Council's inter-agency task force. Today, we are joined by Mr. Xu Nanping, vice minister of science and technology; Mr. Zeng Yixin, vice minister of the National Health Commission, and director of the vaccine R&D working group under the State Council's inter-agency task force; Mr. Chen Shifei, deputy commissioner of the National Medical Products Administration; Mr. Shen Bo, a person in charge of the Department of International Organizations and Conferences of the Ministry of Foreign Affairs; Mr. Mao Junfeng, a person in charge of the Consumer Products Industry Department of the Ministry of Industry and Information Technology; Mr. Zheng Zhongwei, a leader of the vaccine R&D working group under the State Council's inter-agency task force; and Mr. Wu Yonglin, president of China National Biotec Group (CNBG) affiliated with China National Pharmaceutical Group Co., Ltd. (Sinopharm). They will brief you on the conditional marketing approval for the COVID-19 vaccine and other related work in progress, and answer your questions. First, let's give the floor to Mr. Xu.

Xu Nanping:

Good morning, ladies and gentlemen. On Dec. 30, the Beijing Biological Products Institute Co., Ltd. announced the interim results of its phase-3 clinical trials for the COVID-19 inactivated vaccine meeting the standards of the World Health Organization and our National Medical Products Administration (NMPA). The achievement did not come easily. It embodies the wisdom and hard work of China's scientific community. This has received strong support and cooperation from all partners. I hereby would like to express my warm congratulations and heartfelt appreciation to all the institutes and workers participating in R&D of the vaccines.

General Secretary Xi Jinping attaches great importance to vaccine R&D, and has issued important instructions accordingly on a number of occasions. These have been implemented resolutely by the vaccine R&D working group. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the working group has given top priority to vaccine R&D, starting work immediately on one of the five major tasks of scientific research. Taking a people-centered approach throughout, the working group has always put safety first, and is committed to developing safe, effective, and accessible vaccines. Based on science, the working group has been simultaneously working on five technological approaches including inactivated vaccines, recombinant protein vaccines, adenovirus vector vaccines, vaccines using attenuated influenza viruses as vectors, and nucleic acid vaccines, so as to maximize the success rate of vaccine R&D. Always adhering to building a community with a shared future for humanity, the working group has cooperated with 16 countries such as the United Arab Emirates and Brazil to carry out international and multi-centered phase-3 clinical trials for COVID-19 vaccines, promoting R&D cooperation among research institutes and companies both in and outside China. Always adhering to collaboration between different parties, the working group has pooled resources from enterprises, universities, and research institutes. Top research groups from around the nation have been galvanized to work on these tasks. The working group has also coordinated the R&D and examination efforts, and strived to speed up the progress of vaccine R&D without reducing procedures and lowering standards, while always ensuring safety. As of now, 14 kinds of vaccines developed in these five technological approaches have entered clinical trials, among which five kinds of vaccines of three technological approaches have entered phase-3 clinical trials.

Looking forward, we will continue to do our best to speed up vaccine R&D while sparing no efforts. First, we will facilitate phase-3 clinical trials at an accelerated pace, providing more vaccine products of different technological approaches. Second, we will pay close attention to the mutation of the coronavirus and related situation, and respond in a scientific way, making sure the use of vaccines is not affected. Third, we will continue to make greater efforts on the basic R&D front, building China's strategic scientific capacity and providing firm scientific and technological support for epidemic prevention and control. Thank you.

Hu Kaihong:

Thank you, Mr. Xu. Next, let's give the floor to Mr. Zeng.

Zeng Yixin:

Friends from the media, since the outbreak of the COVID-19 pandemic, the vaccine R&D working group has simultaneously worked on five technological approaches under the strong leadership of the CPC Central Committee and the unified deployment of the State Council's inter-agency task force. Relevant vaccine developing companies, scientific research facilities, medical institutes, epidemic control centers, research centers for animal testing, and vaccine regulatory agencies have prioritized people's well-being and leveraged the strength of China's own system. We have made joint efforts and put forward innovative working models, greatly contributing to the COVID-19 vaccine R&D.

The world's first inactivated vaccine, developed by China, was approved for phase-1 and phase-2 clinical trials on April 2. On June 23, China was also the first to carry out phase-3 clinical trials. Then, on June 24, China approved the emergency use of vaccines with strict procedures and in accordance with laws. Since July, many of China's vaccines have been undergoing phase-3 clinical trials outside China. And today, China has granted conditional marketing authorization for our first self-developed COVID-19 vaccine. China has always held a leading position in regard to vaccine R&D in the world. We have also prioritized the safety and efficacy of vaccines during the R&D process. 

As a pandemic unseen in a century, COVID-19 still poses a serious challenge to the world. Despite the strategic achievements in controlling the virus in China, we continue to face enormous pressure in guarding against imported cases and preventing a resurgence of the outbreak at home. As you know, we have seen newly reported sporadic cases in China. To protect the high-risk population, since June, starting from a small range of people and under the principle of volunteer participation and informed consent, we have prudently conducted emergency vaccination, while closely monitoring any adverse effects and preparing for emergency treatment. By the end of November, we had administered more than 1.5 million doses, involving approximately 60,000 recipients who then travelled abroad to work in high-risk areas. There have been no reports of serious infection among them. This has proven that the vaccine is both safe and effective.

As we know, the winter and spring are seasons of frequent infectious disease transmission. To guard against new COVID-19 outbreaks and protect the high-risk population, we have started vaccination of key groups of people working in cold-chain logistics, customs, medical services, public transportation systems, as well as agricultural products and sea food markets. We formally started COVID-19 vaccinations among key groups in China on Dec. 15. In the past 15 days, we have administered over 3 million doses of vaccines. During the vaccination process, we have established mechanisms to build standardized vaccination facilities, provide appropriate training for medical workers, screen recipients' overall health, closely monitor adverse effects, and provide emergency treatment and medical consultations for recipients suffering from serious effects. Altogether, the 4.5 million doses of COVID-19 vaccines given to recipients have proven that our vaccine is safe.

Of course, we have seen some adverse effects among recipients. The incidence is similar to other inactivated vaccines, like injection site pain and swelling. Less than 0.1% recipients have had mild fever, and about two in a million showed allergic reactions and other relatively serious adverse effects. Those people have all been taken good care of, with timely treatment. So, it's important to ask the recipients if they have any serious allergies before vaccination and prepare for sufficient medical services in case of any problems during the vaccination process. Moreover, we should also prepare for coincidental events and psychogenic responses, namely adverse effects caused by psychological factors like nervousness. Coincidental events are adverse effects that are correlated with some certain diseases or accidents. Therefore, we need to remain on high alert during the vaccination process and offer timely professional treatment where necessary.

In the next step, as the vaccine has been granted conditional marketing authorization and as production capacity increases, we will comprehensively vaccinate the high-risk population like senior citizens and people with underlying conditions, and then the general public in an orderly manner. At present, the immunization expert advisory committee has established a unified plan that will fully cover the population who need to be vaccinated so as to establish a strong shield gradually to stop the spread of coronavirus and bring it under total control. Thank you. 

Hu Kaihong:

Please welcome Chen Shifei, deputy head of the National Medical Products Administration (NMPA) for his opening remarks.

Chen Shifei:

Good morning, everyone. I would like to announce some good news: the NMPA has granted conditional marketing authorization for the inactivated COVID-19 vaccine developed by the Beijing Biological Products Institute Co., Ltd. under the China National Biotec Group (CNBG), which is affiliated with Sinopharm.

NMPA has been implementing General Secretary Xi Jinping's thought of putting people first. Under the strong leadership of the CPC Central Committee and the State Council as well as the coordination of the State Council's inter-agency task force, we established a mechanism for research and development of vaccines and drugs as well as emergency evaluation and approval system in the early stage of the epidemic. We have been taking a science-based approach, following legal procedures, and prioritizing the safety and efficacy of the vaccine. We reached out to R&D institutes, adopted a rolling review procedure, and made parallel progress in review, verification and testing to increase our efficiency in facilitating the marketing of a safe and effective vaccine.

Up to now, we have conducted over 5,500 discussions, consultations and research meetings with our R&D teams and expert panels in the development of vaccines and drugs. As Mr. Zeng has just said, we have authorized 14 vaccines to enter clinical trials. Five of them are now in Phase 3 clinical trials, including Sinopharm's inactivated vaccine. We are also facilitating several drugs in the pre-clinical trial stage.

As we all know, vaccines are an important weapon against epidemics, but their safety and effectiveness are always top priority. After the coronavirus outbreak, the National Medical Products Administration (NMPA) cooperated closely with the World Health Organization (WHO) and the medical products administrators of other countries, and exchanged information on vaccine research and development (R&D) and coordinated the standards of safety and effectiveness with them. On this basis, the Center for Drug Evaluation of the NMPA specially formulated five standards including technical guidelines for R&D of preventive vaccines against COVID-19, and made clear the technical standards for market access application and conditional market approval of vaccines against COVID-19, offering relevant references to the R&D and evaluation of China's vaccines against COVID-19.

In addition, the standards for COVID-19 vaccines are basically the same as those of the WHO and other countries, providing scientific support for China's vaccines to become a global public good. The Beijing Institute of Biological Products of China National Biotech Group on Dec. 23 formally submitted a registration application to the Center for Drug Evaluation of the NMPA for conditioned market access of its vaccine based on preliminary rolling submissions of research data. The center accepted it immediately. Its expert team conducted a comprehensive and detailed review of the safety, effectiveness and quality reliability, as well as other submitted research documents and data based on preliminary rolling reviews. The review covered pharmacological and toxicological research, phase I and II clinical trials, phase III clinical trials carried out overseas, and the Beijing Institute's pharmaceutical research data on large-scale production and quality control. The center also inspected the sites of domestic R&D activities and phase I and II clinical trials; however, we are unable to send experts overseas for on-site inspections of phase III clinical trials there due to the pandemic. It is mainly the research organizations that assume major responsibility in ensuring the integrity, authenticity and reliability of the research data. Our drug inspection institution also carried out trial remote inspections, a work that is never before carried out. We undertook remote inspections in response to inaccessible sites existing amid the pandemic.

Besides, the Center for Food and Drug Inspection of NMPA inspected the production sites of the Beijing Institute in accordance with the law. The Beijing Municipal Medical Products Administration reviewed its quality control practices in drug production. The National Institutes for Food and Drug Control conducted laboratory tests on and reexamined the quality of vaccine samples produced by the Beijing Institute in trial production. It also thoroughly reviewed the data of vaccine efficacy (79.34%) submitted and unveiled by the Beijing Institute according to interim results of the phase III clinical trials based on large-scale double-blind placebo-controlled analysis. It consulted a third-party expert team for their evaluation and suggestions on conditional market access, and the expert consultation meeting of the Center for Drug Evaluation for further opinions. After a series of rigorous inspections, examinations, evaluations, reviews, and data analysis in accordance with laws and procedures, we concluded that the known and potential benefits of the inactivated vaccine against COVID-19 of the Beijing Institute of Biological Products of China National Biotech Group were greater than the known and potential risks, completely meeting preset standards for conditional market access.

Amid the pandemic, over 80 million cases have been reported around the world, and a large number of patients are being hospitalized and many are passing away every day. There is no wonder drug against the virus available in the world yet. China is facing pressure from both potential local transmission and imported cases, so national medical products administrators can approve registration applications for conditional market access of the vaccines urgently needed in response to major public health emergencies in accordance with the Vaccine Administration Law of the People's Republic of China and the Pharmaceutical Administration Law of the People's Republic of China. Therefore, the NMPA approved conditional market access of the Beijing Institute's vaccine on Dec. 30. The NMPA is encouraging the company to continue its phase III clinical trials as planned in accordance with laws and regulations, complete them and other post-approval research with quality and quantity guaranteed, update and supplement vaccine instructions and labels in time based on research progress, data and results obtained, and absorbing study of abnormal reactions after inoculation, and apply to us for approval or filing in accordance with regulations.

The NMPA is engaged in a race against time in emergency evaluation and approval of vaccines and drugs and in proceeding with their R&D, while adhering to science-based principles and the premise of safety and effectiveness. We will ensure that the vaccines and drugs approved for emergency use by us are safe, effective, and reliable in quality, and make due contributions to the ultimate victory over the virus. Thank you.

Hu Kaihong:

Thank you, Mr. Chen. Now the floor is open to questions. Please identify your news outlet before raising questions.

CCTV:

What regulatory measures will the authorities take to ensure the quality and safety of COVID-19 vaccines conditionally allowed to enter the market? Should the supervision be stricter and more regulated in terms of conditional market entry?

Chen Shifei:

Thank you for your question. The National Medical Products Administration (NMPA) has always adhered to the "four strictest requirements" in regard to drug safety, and has fully implemented the supervisory tasks for drug quality and safety, including those of vaccines. Vaccines are intended for healthy people. Therefore, we attach great importance to ensuring their quality and safety. Following conditional marketing authorization for COVID-19 vaccines, we have strengthened our supervision in regard to the following aspects to ensure that every vaccine meets quality requirements.

First, quality comes from adequate arrangement and guidance. As early as the research and development stage of vaccines, we actively make arrangements and provide guidelines to the technical institutions directly under the NMPA and provincial drug regulatory authorities, in order to track and guide the relevant work. During the construction of production facilities, we have selected and dispatched competent technicians to provide on-site guidance to the enterprises involved. On the premise of not reducing procedures or lowering the standards, we have issued drug production licenses in a timely way to vaccine manufacturers that meet the required standards. We have ensured that vaccine manufacturers have relevant technologies and management capacity by strictly enforcing the issuing rules of drug production licenses.

Second, in the process of production supervision, the NMPA has acted in accordance with relevant laws, regulations and standards including the Vaccine Management Law, the Pharmaceutical Administration Law and the Good Manufacturing Practice (GMP) of Medical Products. We have intensified supervision over the COVID-19 vaccines' quality together with provincial drug regulatory departments. So far, we have carried out many audits and inspections of the quality and safety of the production sites of the Beijing Biological Products Institute Co., Ltd. under the China National Biotec Group (CNBG) affiliated with Sinopharm. The drug regulator in the locality where the enterprise is located has stepped up its efforts in regard to daily supervision, posted capable professionals to the enterprise for oversight, in order to ensure its compliance in the vaccine production process so that the vaccines are qualified. In addition, we also organized the National Center for Vaccine Inspection to conduct regular inspections on vaccine manufacturers and random checks on vaccines at irregular intervals. What's more, we arranged for the Center for Drug Reevaluation to cooperate with health departments to do a good job in monitoring the suspected adverse reactions to the vaccination. Through these measures, we have supervised enterprises so they earnestly fulfill their primary responsibility for products quality and safety, and organize production in strict accordance with the approved production techniques and quality standards. For each batch of vaccines that leaves the factory, their lot release will be carried out by the drug regulatory authorities. Earlier this year, we began to enhance our lot release capacity to accommodate the production increase following the vaccines' market entry. After strict examination and comprehensive assessment, we have now authorized drug regulatory and inspection institutions in Beijing and Hubei province to undertake the lot release task of COVID-19 vaccines. Therefore, after the vaccines enter the market conditionally, the lot release agencies will carry out strict data review and laboratory tests on each batch of vaccines following relevant regulations and management measures for biological products lot release, so as to ensure that each and every vaccine is qualified.

Finally, we have improved the whole-chain supervision of vaccines. The NMPA, together with the National Health Commission, has established an information technology-based traceability system for vaccines, basically realizing whole-process traceability management of vaccines entering the market. Currently, domestically produced and imported vaccines are tracked during the entire process through self-developed traceability systems or third-party platforms. Thank you.

China National Radio:

We would like to know, compared with foreign vaccines, what are the advantages of Chinese vaccines in terms of safety, efficacy and accessibility? How do we evaluate a vaccine comprehensively? Thank you.

Zheng Zhongwei:

Thank you for your question. Recently, I have noted that people are very concerned about the safety, efficacy and data published by the media in regard to the vaccines. There are many indicators for vaccine evaluation, and I think the very important ones include safety, efficacy, accessibility and affordability, among which safety and efficacy are the most important, as previous speakers have introduced. The safety of vaccines generally refers to whether there will be any adverse reactions and the severity of these after vaccination. The vaccines are considered safe if people don't experience adverse reactions, if they do, they aren't serious, or the probability of experiencing serious adverse reactions is quite low. As we all know, vaccines are special products for healthy people, so their safety is the first priority, which is the fundamental principle we have followed in advancing the research and development of vaccines.

Vaccine efficacy refers to whether people will be infected, or the level of severity of the infection if they are exposed to the pathogen after getting vaccinated. We consider the vaccine to be effective if the person vaccinated remains free from infection, or the infection is relatively mild. Therefore, some may find that when releasing efficacy data, some companies will also release a protection rate for severely ill patients. This is how we explain vaccine efficacy. 

In the vaccine development process, we have tested the safety and efficacy of the vaccines on animals and humans on differing scales, based on animal tests, and phase I, phase II, and phase III clinical trials. As the introductions of speakers about China's vaccine research and development, a total of 14 vaccine candidates currently are undergoing clinical trials with five entering phase III clinical trials. These have been proved to be safe in the animal tests, and phase I and phase II clinical trials. Some of them have published the results in top medical journals around the world, and highly commended by the WHO. Besides safety and efficacy, accessibility and affordability of vaccines are also of prime concern. Only if a vaccine is safe and effective, and at the same time accessible and affordable, can the vaccine truly become a public good.

Talking about which vaccine is better, or comparing Chinese self-developed vaccines and foreign vaccines, I don't think we can draw any simple conclusions. The reason why we laid out the five technical routes in vaccine development is because each of them has its own advantages. Only by comprehensively reviewing the safety, efficacy, accessibility, and affordability of each vaccine can we achieve a scientific evaluation. For example, inactivated vaccines and recombinant protein vaccines, whose research and development are currently being advanced, have undergone tests by billions or even tens of billions of people for many years. Their safety, efficacy, and accessibility have stood the test of time and been proven through scientific methods. However, with the development of science and technology and of human society, there will be new vaccines developed using new technologies and methods in the future, which are better in terms of safety, efficacy, accessibility and other aspects.

The COVID-19 pandemic has made us more aware that humanity is a community with a shared future, and a community of health for all. In the process of advancing vaccine research and development, Chinese vaccine companies and teams have only one enemy, which is the virus. We are racing against the advance of the virus. Throughout the research and development process, we fully respect the laws and principles of science. China was the first country to launch clinical trials including phase III ones. In the process, we are strictly following relevant scientific principles, and will never compromise these principles in a rush to seek first place. This is our basic principle in the process of advancing vaccine research and development. Thank you all!

Bloomberg:

I have some questions about the vaccine data. Can you share with us more information on CNBG's vaccine efficacy data? In addition, when will the efficacy data of other vaccines be released? If the data is released later than foreign countries, will that mean China's vaccines have fallen behind? In addition, how can CNBG ensure that its production can meet both domestic and foreign demand? Thank you.

Wu Yonglin:

Thank you for your attention and concern for vaccines of the CNBG, affiliated with Sinopharm. We have conducted large-scale phase III clinical trials in the United Arab Emirates, Bahrain, and other countries, involving 60,000 volunteers of 125 nationalities. We have completed phased assessment of the protection rate and the results have exceeded the clinical research goals. The safety and efficacy exceeded the standards set by the WHO. They meet the requirements of China's conditional approval plan and can help establish effective immunity in a wide range of public groups. Therefore, on Dec. 9 and 13, the UAE and Bahrain respectively reviewed and approved the official registration of the CNBG's inactivated vaccine and put it on the market in accordance with the relevant technical standards of the WHO. Yesterday, China also granted conditional marketing authorization for the vaccine.

The detailed data will be announced later, and will also be published in Chinese and foreign medical journals. Please pay attention to the release. Thank you.

CGTN:

Media reports say that the COVID-19 virus is mutating. Will the virus variants affect the vaccine's effectiveness? Will the vaccine that has been granted conditional marketing approval work against the virus variants? Thank you. 

Xu Nanping:

This is a very important question. The mutation of the COVID-19 virus is a problem that many are concerned about. It is also an important subject that our research and development team has focused on. We established a special research team at the very beginning of our research to study mutations of the virus. Currently, we have a database of nearly 300,000 COVID-19 genomic sequence data at the China National Center for Bioinformation and we have kept a close eye on the virus' daily variations which are now within a normal range on the whole. The effectiveness of the vaccine on the virus variants is something that we're very concerned about, especially after the media reported that a new COVID-19 variant detected in the U.K. remarkably improved the virus' transmissibility. Given this, together with our previous research, experts from the research and development team have further studied the effects that the virus variants may have on the effectiveness of the vaccines. The results showed that there is currently no evidence to prove that existing genetic mutations in the novel coronavirus will have a substantial effect on the efficacy of COVID-19 vaccines. 

However, we must be vigilant about this issue. The long-term spread of the virus may cause some variants to accumulate, so in this regard, our research and development team has adopted the principle that "it is always better to be prepared than not." The mutations having no effect on vaccines now does not rule out the possibility that they may have an effect in the future. Therefore, we have posed this outcome as an absolute certainty and planned our research accordingly. This is the basic principle of our work. We have already made certain plans and several expert groups have been engaging in studies on certain tasks such as virus variation, detection reagents, drug development, and vaccine effectiveness. Please trust science and the scientists. We have the confidence to address the effects that virus variants may have on the efficacy of vaccines. We will ensure the supply of safe, effective, and accessible vaccines to the people. Thank you.

Phoenix TV: 

When will the vaccines be available for all Chinese people? Thank you. 

Zeng Yixin:

The eradication of an infectious disease will ultimately depend on a vaccine. We are planning to reach herd immunity through vaccination and have granted emergency use of COVID-19 vaccines since June. On Dec. 15, we began vaccinating some priority groups with COVID-19 vaccines. This is the first step of our vaccination agenda, which aims to ensure that key groups at high risk of infection are the first to receive inoculation. Once COVID-19 vaccines are approved to enter the market and production capacity has increased, we will vaccinate high-risk groups, namely senior adults and people with underlying conditions, as they are far more likely to suffer severe symptoms after infection. After this, we will vaccinate the general public. 

Regarding the issue of how many people should be vaccinated to achieve herd immunity, I should point out that the rate could vary depending on the population distribution of each country. Generally, the inoculation rate needs to be over 60 percent to 70 percent to reach herd immunity. The vaccines that we have approved are safe and effective, so I would like to call on the public to get vaccinated on the premise of informed consent and without contraindications. By doing so, we are protecting ourselves, our families, and others, as well as contributing to global pandemic prevention and control. Thank you.

AFP:

What is China's production capacity for COVID-19 vaccines? Thank you.

Mao Junfeng:

Thank you for your question. This question is of great concern to many people. In fact, we, as a competent department of the industry, asked ourselves this question early on. Hence, the MIIT has closely tracked the development of COVID-19 vaccines and accelerated the industrialization of vaccines, following in the spirit of General Secretary Xi Jinping's important instructions on advancing the integration of vaccine R&D and the industrialized chain. To this end, we have set up a special work team to ensure the smooth production of the COVID-19 vaccine via numerous means. These include scheduling key enterprises’ production capacity building on a weekly basis and organizing industry and information technology departments in relevant provinces and cities to assign special personnel to contact and serve enterprises so as to accelerate the production capacity building across various technical routes of vaccine development. Meanwhile, the MIIT has also made a comprehensive review of the entire industry and supply chain of COVID-19 vaccines, guiding companies to conduct serious research and analysis on the supply risks of key raw and auxiliary materials, key equipment, consumables, and other important production materials, and make supply and demand connections between upstream and downstream enterprises to ensure the stability of the production supply chain of COVID-19 vaccines. 

According to the scheduling, a total of 18 domestic enterprises have started to build their production capacity in accordance with their vaccine research and development progress. So far, three companies, including the Beijing Biological Products Institute and Wuhan Biological Products Institute of China National Biotech Group, and Sinovac, have fulfilled their production capacity building tasks for this year. Their high-biosafety workshops for inactivated COVID-19 vaccines have passed the inspections by multiple departments. In particular, the inactivated vaccine developed by the Beijing Biological Products Institute of China National Biotech Group was approved for conditional market launch yesterday. The company has now launched large-scale production.

While these enterprises carry out large-scale production, the MIIT has also been organizing them to simultaneously expand their production capacities. Therefore, the production capacity is a dynamic and continuously increased process. For other technical routes, production capacity expansion are progressing as scheduled. With the further expansion of the production capacity of the inactivated COVID-19 vaccines as well as the gradual production capacity progress of enterprises engaged in other technical routes, I believe that our production capacity for COVID-19 vaccines is able to meet the demand of mass vaccination in China.

Next, the MIIT will follow the decisions and plans made by the Central Committee of the Communist Party of China (CPC) and the State Council to enhance coordination and cooperation with relevant departments to form policy synergy, further promote expansion of production capacity, and ensure a smooth supply chain for vaccine production to prepare for an organized and guaranteed mass production of COVID-19 vaccines. Thank you.

China Daily:

Pharmaceutical companies such as U.S. Pfizer and Moderna as well as the UK's AstraZeneca have announced plans to promote their vaccines. What role will China play in the COVID-19 Vaccine Global Access Facility (COVAX) after the COVID-19 vaccine is launched in the market conditionally? Thank you.

Shen Bo:

Thank you for your concern about international cooperation on vaccines. The epidemic knows no borders. It is therefore the common aspiration of all countries in the world to unite against the epidemic and promote recovery through cooperation. China has always been open to international cooperation on vaccines and the Chinese government has actively supported COVAX. On Oct. 8, China signed an agreement with Gavi to officially join COVAX, marking an important move of China to uphold the vision of the world as a global community of health for all and promote vaccines as a global public good.

At present, many Chinese COVID-19 vaccines have entered phase Ⅲ clinical trials and many other vaccines are stepping up their phase I and phase II clinical trials. The Chinese government has actively encouraged and supported Chinese vaccine research and development enterprises to join COVAX and cooperate with relevant initiators to provide vaccines to developing countries. It is understood that many Chinese vaccine companies have expressed to COVAX their willingness to join the program, and are negotiating with different countries regarding vaccine supply plans. We are looking forward to the inclusion of Chinese vaccines in the COVAX vaccine pool and pre-certification of Chinese vaccines by the World Health Organization at an early date.

China will continue to work with all parties to promote the equitable distribution of global vaccines, facilitate global solidarity in the fight against the epidemic, and protect the lives and health of people around the world. Thank you.

Global Times:

Regarding the COVID-19 vaccine that has been granted conditional marketing authorization, how long will the antibody and its efficacy last? Thank you.

Wu Yonglin: 

Thank you for your question. CNBG under the State-owned pharmaceutical giant Sinopharm has conducted clinical research of phase I and II at home and phase Ⅲ research abroad, with constant observation as to the antibodies. The phase I and II research data shows that the antibody can maintain at a high level for over six months in humans. Countries such as UAE (United Arab Emirates) and Bahrain have approved China's homegrown coronavirus vaccine for their own public use in accordance with WHO standards. And the interim analysis of clinical trials shows its protective effects have realized and passed the requirements for public use. Countries undertaking clinical researches will further observe the durability of the antibody. According to China's requirements for conditional marketing authorization and WHO technological standards, the interim analysis and data monitoring have achieved their due objectives in line with the marketing demand. As an innovative vaccine, its durability and protective effect will be verified after a longer period of observation. However, we still believe that, with the progress of the phase Ⅲ clinical trial, we will gain and publish data showing long-term protection. Thank you!

Lianhe Zaobao:

As has been mentioned, the assessment of a vaccine involves its safety, effectiveness, accessibility and affordability. So, what will be relevant price range?

Zheng Zhongwei:

The price will be generally decided by the manufacturer. It will follow two main principles: first, the nature of a public good, second, as a public good, its price should be based on cost. It is widely known that the cost of a product may vary based on the scale of manufacturing and its usage. We are ready for a large-scale production and the inoculation plan for our homegrown vaccine which has been approved for public use. Just as director Zeng has mentioned, we will launch the inoculation plan with a three-step approach: firstly, open to "key groups" or "high-risk groups" and then inoculation of vulnerable groups before vaccinating the general population. As the work proceeds smoothly, the cost will be greatly reduced. We believe that the price will be affordable and acceptable to the people.

Zeng Yixin:

The vaccine is a public good in its nature and the price may vary due to its scale of use. But an important premise is that it will be provided free of charge to all Chinese people. Thank you!

Hong Kong Economic Herald:

How many orders has China's vaccine received from overseas? What are the preferred exporting plans in the future? Thank you!

Shen Bo:

Thank you for your question. China remains open to international cooperation and actively supports Chinese enterprises' research and production cooperation with global counterparts to benefit the whole world. Many Chinese vaccine candidates are undergoing phase Ⅲ trials smoothly in countries such as UAE, Bahrain, Argentina, Peru, Brazil, and Indonesia. Among them, UAE and Bahrain have recently approved registration and usage of the inactivated vaccine manufactured by Sinopharm.

After China's vaccine moves to public usage, it will be provided globally at a fair, reasonable price. We will still attach importance to its accessibility and affordability in developing countries and will positively offer them in many ways. Donation and non-reimbursable assistance will also be considered in terms of different situations in developing countries. We also call on the international community to work together to promote fair distribution of the vaccine, and strive to make the vaccine a public good that is accessible and affordable to people worldwide. Thank you!

Hu Kaihong:

That's all for today's press conference. Thank you all.

Translated and edited by Zhu Bochen, Wang Wei, Guo Yiming, Wang Qian, Zhang Jiaqi, Li Huiru, Xu Xiaoxuan, Huang Shan, Wang Yiming, Wang Yanfang, Gong Yingchun, Zhou Jing, Duan Yaying, Yuan Fang, Zhang Tingting, Fan Junmei, Geoffrey Murray, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Zhang Jianhua, member of the Party Group of the National Development and Reform Commission (NDRC) and administrator of the National Energy Administration (NEA)

Zhao Chenxin, secretary general of the NDRC

Zhu Ming, director of the Department of Legal System and Structural Reform of the NEA

Chairperson: 

Hu Kaihong, spokesperson for the State Council Information Office

Date: 

Dec. 21, 2020

Hu Kaihong:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, the SCIO released a white paper titled Energy in Chinas New Era, and so we will introduce and interpret its main content during this press conference. Today, we are joined by Zhang Jianhua, member of the Party Group of the National Development and Reform Commission (NDRC) and administrator of the National Energy Administration (NEA); Zhao Chenxin, secretary general of the NDRC; and Zhu Ming, director of the Department of Legal System and Structural Reform of the NEA. I am Hu Kaihong, spokesperson for the SCIO.

First, I will start by briefly introducing the white papers main content.

The white paper Energy in Chinas New Era conforms to a series of important statements on energy development made by General Secretary Xi Jinping, and comprehensively introduces Chinas implementation of a new energy security strategy featuring Four Reforms and One Cooperation. Major changes have taken place in the production and use of energy and historic achievements have been realized in energy development. The white paper introduces Chinas guiding philosophies and practices in participating in global energy governance, jointly tackling global climate change and promoting the building of a community of shared future for mankind. Totaling around 24,000 words, the paper consists of three parts: preamble, main body and conclusion.

The paper is available in eight languages: Chinese, English, French, Russian, German, Spanish, Arabic and Japanese. It is published by the Peoples Publishing House and Foreign Languages Press, and is available in Xinhua bookstores across the country.

That concludes my introduction. Next, I will give the floor to Mr. Zhang Jianhua, member of the Party Group of the NDRC and administrator of the NEA.

Zhang Jianhua:

Ladies, gentlemen, friends, good afternoon. I am very pleased to meet you here to release and introduce the white paper Energy in Chinas New Era. First of all, I would like to thank you for your interest in and support for Chinas energy development.

Since the 18th CPC National Congress, looking toward the development requirements for the new era, President Xi Jinping put forward a new energy security strategy featuring Four Reforms and One Cooperation. He personally guided the promotion of reforms to improve energy consumption and the supply structure, to upgrade energy technologies, and to optimize the energy system. He stressed comprehensive cooperation with other countries and the promotion of a system of clean, low-carbon, safe and efficient energy, which has brought Chinas energy development into a new, high-quality development stage. The white paper illustrates Chinas historic achievements in advancing energy reforms since the 18th CPC National Congress, and provides a full picture of Chinas major policies and measures concerning its energy security development strategy in the new era and new stage. It aims to help people at home and abroad fully understand Chinas energy policies and development. The white paper focuses on the following five aspects:

First, it introduces Chinas energy development strategy and policies in the new era. Under the guidance of the new energy security strategy, we have promoted energy consumption reform, resolutely controlled total energy consumption, highlighted energy conservation throughout the entire process and various fields of social and economic development, and accelerated the move toward an energy-saving society. We have enacted reforms to build a more diversified energy supply structure featuring an increased share of non-fossil energy and coal, oil as well as gas as the basic energy sources. Working toward green and low-carbon development, we have fostered innovation in technology, industry and business models and promoted reforms to improve energy technologies to upgrade the industry. We have carried out reforms to optimize the energy system to build an effectively competitive market structure and market system and modernize the law-based energy governance system. We have strengthened international energy cooperation across the board to realize energy security in an open environment, and joined other countries in pursuing sustainable energy. China upholds the vision of innovative, coordinated, green, open and shared development. Chinas energy policies have the following features: First, we are adhering to a people-centered approach and prioritizing providing energy for the people; Second, we are promoting clean and low-carbon energy, accelerating the transformation toward green and low-carbon development, and increasing the proportion of clean energy and non-fossil energy at the consumption stage; Third, we are ensuring the core status of innovation, actively promoting independent innovation in energy technologies, and promoting breakthroughs in key technologies in the energy field and technological progress in the industrial chain at the same time; Fourth, we are pursuing development through reform, building a high-quality energy market system, and continuously unleashing market vitality; Fifth, we are working to build a global community with a shared future. China advocates greater international cooperation on energy governance and energy reform directed toward clean and low-carbon development. China has joined other countries in building a clean and beautiful world.

Second, the white paper introduces the historic achievements of Chinas energy development in the new era. Since the 18th CPC National Congress, major changes have taken place in the production and use of energy and a diversified energy production infrastructure is now in place. We have also promoted energy conservation. China saw an average annual growth of 7% in the economy, while annual energy consumption rose by only 2.8%. The consumption of clean energy accounted for 23.4% of total energy consumption, representing an increase of 8.9 percentage points over 2012. The cumulative installed capacities of hydropower, wind power and solar photovoltaic (PV) power each rank No. 1 in the world. We have complete industrial chains for the manufacturing of clean energy equipment for hydro, nuclear, wind and solar power, which supports the development and utilization of clean energy. Green development of the energy sector has played an important role in reducing carbon emissions. By 2019, carbon emission intensity in China had decreased by 48.1% compared with 2005, which exceeded the target set in 2015 of reducing carbon emission intensity by 40%-45% ahead of schedule.

Third, the white paper introduces the major measures China has taken to build a clean, low-carbon, safe and efficient energy system. China has made comprehensive efforts to reform energy consumption and put in place a dual control system of total energy consumption and energy intensity. It has improved laws, regulations and standards for energy conservation, and relevant incentives. China has accelerated energy efficiency improvements in key areas and promoted clean final energy consumption. It has accelerated the building of a clean and diversified energy supply system, prioritizing non-fossil energy and promoting the clean and efficient development and utilization of fossil energy. China has improved its energy storage, transportation and peak shaving system, and strengthened its capacity to ensure energy security. It has leveraged the role of innovation as the primary driver of development and improved energy policies relating to scientific and technological innovation. Diverse platforms for technological innovation in energy at various levels have been created. China has promoted coordinated scientific and technological innovation in key areas of the energy sector, and supported the development of new technologies and new business forms and models to develop energy technologies. It has deepened reforms of the energy system in all areas and created an energy market with effective competition. The market-based mechanism for deciding energy prices has been improved. China has extended reforms in the energy sector to delegate powers, improve regulation and upgrade services. It has also improved the rule of law and governance mechanism in the energy sector. 

Fourth, the white paper introduces the measures and achievements in carrying out targeted poverty alleviation through energy projects and ensuring energy supply for peoples daily life. The primary goal for Chinas energy development is to ensure and improve energy supply for peoples life, especially for those living in poverty. China has ramped up efforts to support construction of energy projects in rural poverty-stricken areas. It has implemented programs to renovate and upgrade power grids and supplied poor villages with electricity for industrial and commercial use. China implemented a three-year action plan to ensure access to power for people without electricity, and achieved this goal by the end of 2015. China prioritizes poverty-stricken areas in planning energy development projects for the benefit of local economic development. It has adopted major projects such as poverty alleviation projects based on solar PV power generation to increase the income of impoverished households. China has actively promoted the use of clean energy for heating in rural areas in the north of the country to improve the environment and peoples everyday life.

Fifth, the white paper introduces the new model for international energy cooperation across the board. China is committed to opening its energy sector wider to the world, and has reduced restrictions on access to the energy sector for foreign investment. For example, in 2019, China removed restrictions for foreign investment into the oil and gas exploration and development sectors. It has established comprehensive energy cooperation based on mutual benefits and win-win results. Solid progress has been made in building a silk road with green energy. It has been actively participating in global energy governance and joined hands with other countries to tackle climate change. China proposed that the international community should jointly promote the transition to green and low-carbon energy, jointly consolidate multilateral energy cooperation, jointly facilitate international investment in energy trading, jointly improve energy access in underdeveloped areas, and jointly promote the sustainable development of global energy and maintain global energy security. 

We hope that the white paper will help people understand the huge efforts that China has made in promoting the transition to green and low-carbon energy and its contributions to global efforts in tackling climate change and promoting sustainable energy development. At the general debates of the 75th U.N. General Assembly in September 2020, President Xi Jinping pledged that China will strive to have carbon dioxide emissions peak before 2030 and achieve carbon neutrality before 2060. In December, President Xi announced further commitments for 2030 at the Climate Ambition Summit: China will lower its carbon dioxide emissions per unit of GDP by over 65% from the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 25%, and raise the total installed capacity of wind and solar power to over 1.2 billion kilowatts. This sets a new direction for China's energy development. We will work with firmer resolve and put in more efforts to carry out the energy revolution. We will move faster to create a clean, low-carbon, safe and efficient energy system to support the Beautiful China initiative and make greater contributions to building a clean and beautiful world. 

That concludes my brief introduction. Thank you. Now my colleagues and I are happy to answer any questions.

Hu Kaihong:

Thank you, Mr. Zhang. Now I will open up the floor for questions.

CCTV:

My question is: Faced by increasing complexities in the energy security situation, how will China balance energy security with its transition to green and low-carbon energy? Thank you.

Zhang Jianhua:

I will answer your question. China has become the worlds largest energy producer, as well as the worlds largest consumer. As we have ushered in a new era of socialism with Chinese characteristics, to ensure the high-quality development of the economy and society, we must ensure sufficient energy supplies and improve the quality. In particular, the green and low-carbon global energy transition is picking up speed, and we are facing new situations and challenges in ensuring energy security. 

I mentioned that President Xi recently pledged that China will strive to have carbon dioxide emissions peak before 2030 and to achieve carbon neutrality before 2060. By 2030, China will increase its share of non-fossil fuels in primary energy consumption to around 25% and bring the total installed capacity of wind and solar power to over 1.2 billion kilowatts. This sets a clear timetable for us to build a clean, low-carbon, safe and efficient energy system. We will study and implement the new energy security strategy, accelerate the transition while maintaining energy security, and properly manage the planning and coordination.

First, we will strengthen the clean development and utilization of coal, and intensify oil and gas exploration and exploitation. We will also accelerate the building of a system that covers production, storage, supply and sales of natural gas to ensure the basic supply. 

Second, we will speed up the development and utilization of non-fossil energy, including wind power, solar power and biomass. China strives to replace high-carbon with low-carbon energy and fossil energy with renewable energy.

Third, we will take the building of new-generation information infrastructure as an opportunity to advance digital and intelligent development of the energy sector and improve the intelligence of the energy industrial chain. We will coordinate the development of various energy resources, and facilitate the interaction between supply and demand, and the development of new business forms and models. We will strive to increase the efficiency of the energy system as a whole. Thank you.

Beijing Daily:

Thank you, chairperson. In 2013, the central government proposed to fight a tough battle against pollution and win the battle to defend the blue sky. What results has China made in energy conservation and emission reduction? In addition, what measures will be taken to improve energy efficiency and to transform energy consumption patterns? Thank you.

Zhang Jianhua:

This question goes to Mr. Zhao Chenxin, secretary-general of the National Development and Reform Commission (NDRC).

Zhao Chenxin:

Thank you for your question. You just mentioned the fight against pollution and the battle to defend the blue sky. These are important strategic deployments made by the CPC Central Committee with Comrade Xi Jinping as its core, with focus placed on the overall development of the Party and the country, and comply with the people's expectations for a better life.

In recent years, in accordance with the deployments of the CPC Central Committee and the State Council, the Energy Bureau of the NDRC and related departments have jointly adhered to the energy development strategy of priority to conservation. We have carried out related work focusing on energy conservation, improvement of energy efficiency, and the reduction of pollutant emissions. I can say that very good results have been achieved.

I would like to introduce the specific situation to you in four aspects:

First, the energy-saving target responsibility has been further strengthened. We continue to regard the decline in energy consumption intensity per unit of GDP as a binding indicator for national economic and social development. We have established a dual control system for total energy consumption and energy intensity, and enhanced evaluation and assessment, using energy conservation to force high-quality development. The effect of this is evident.

Second, we are constantly improving energy-saving laws, regulations and the standards system. The Energy Conservation Law has been revised, and management methods such as energy efficiency labeling, energy-saving reviews, and energy-saving supervision have been formulated and revised. The current number of national mandatory energy-saving standards has reached nearly 200, which is a very large number. The relevant standards are becoming more and more perfect. The leading and regulating role of laws, regulations and standards has been continuously strengthened.

Third, energy conservation in key areas has been further strengthened. We have accelerated the green transformation of industries and fully implemented green construction standards. In addition, as everyone may know, the number of new energy vehicles in China now ranks first in the world. At the same time, we also encourage public institutions to take the lead nad set an example for energy conservation.

Fourth, the energy-saving policy mechanism is being further improved. We have implemented market-oriented mechanisms such as contract energy management, formulated and implemented supportive policies such as price, taxation, and finance that are conducive to energy conservation, and also carried out trials of energy rights, paid use, and transactions.

You can find a series of data listed in the white paper "Energy in China's New Era. I will not repeat them here. These data introduce the reduction in energy consumption per unit of GDP and the reduction of carbon dioxide emissions in China in recent years. Mr. Zhang also introduced the relevant situation in his speech just now. I think these changes have provided strong support for improving the quality of the ecological environment and promoting the sustainable and healthy development of economy and society.

Next, we will continue to implement Xi Jinping's thinking on ecological civilization and the spirit of the fifth plenary session of the 19th Central Committee of the Communist Party of China. According to the deployment of the Central Economic Work Conference, we will take effective measures to achieve peak carbon emissions and carbon neutral goals, continue to improve energy efficiency and accelerate the transformation of energy consumption patterns.

Here I will also go into details and talk about several aspects.

The first is to uphold and improve the dual control system for energy consumption, establish and improve management systems such as energy budgets, and promote efficient energy allocation and rational use.

The second is to accelerate the adjustment and optimization of the industrial structure and energy structure, vigorously develop photovoltaic power generation, wind power and other renewable energy sources, and promote coal consumption to peak as soon as possible.

The third is to strengthen the management of key energy-consuming entities, accelerate the implementation of energy-saving projects such as comprehensive energy efficiency improvement, and further promote energy conservation and consumption reduction in key areas such as industry, construction, and transportation. We will also continue to improve the energy efficiency of new infrastructure.

The fourth is to accelerate the construction of a national energy rights trading market, extensively carry out national energy conservation actions, and create a good overall social atmosphere conducive to energy conservation.

These are my answers to this question. Thank you.

Zhang Jianhua:

Thank you, Secretary-General Zhao Chenxin. Let me add a set of statistics, which can help you better understand Secretary-General Zhao's answers.

Between 2013 and 2019, China's energy consumption per unit of GDP dropped by 24.4%, which translates into energy savings of more than 1.2 billion metric tons of standard coal, which is equivalent to reducing carbon dioxide emissions by approximately 2.7 billion metric tons. I also said in my speech that it means an average annual energy consumption growth rate of 2.8% supports the GDP growth rate of 7%. Thank you.

Shenzhen TV:

Recently, some regions including Hunan and Jiangxi provinces have adopted measures to ration electricity use, drawing wide public attention. Are these measures related to Chinas goals for energy conservation and emissions reduction? How should we best strike a balance between electricity supply, energy conservation, and emissions reduction? Thank you.

Zhang Jianhua:

Mr. Zhao Chenxin will answer this question.

Zhao Chenxin:

Thanks for your question. Let me give some background information about recent rising energy demands. We have found that electricity demand is rising beyond our expectations due to the rapid growth of industrial production and the effects of cold waves.

Here are some specific figures. Since December, we have seen some of the highest demands for electricity from across the country in Hunan and Jiangxi provinces. According to our electricity production bulletins, Hunans production and use of electricity rose 19.8% in early December. In the last few days, its maximum electricity load measured 31,440MW, up nearly 2,000MW over its record peak. That increase is huge.

In early December, Jiangxis production and use of electricity rose by 18.4%, slightly smaller than that of Hunan but was still a large increase. The maximum electricity load in Jiangxi currently stands at 26,310MW. People who follow the power industry closely may know that peak energy consumption normally occurs in summer. However, Jiangxis recent peak was 500MW or 600MW higher than its record high in summer. That means both Hunan and Jiangxi have broken new records in power consumption.

Zhejiangs production and use of electricity earlier this month rose by 9.2%, which is among the highest in the eastern provinces. All of these factors are driving the demand for thermal coal. You may have witnessed that coal prices are also growing slightly, but I want to reassure you that we have sufficient coal inventory to guarantee supplies.

Until now, our electricity supply has been generally stable. Chinas household electricity use, including in Hunan, Jiangxi, and Zhejiang, have not been affected. With rising electricity demands in winter, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) will work together with other departments and power companies to ensure a stable electricity supply. Hunan and Jiangxi have long been areas that require strong efforts to ensure a steady electricity supply in winter due to their relatively long distances from coal sources and limited access to electricity transmitted from other places. 

In face of electricity shortages, government departments in Hunan and Jiangxi have adopted several measures based on their predictions, to guide the orderly use of electricity by rationing its use among select businesses. This will hopefully balance power demand and supply, ensure households have access to electricity, and maintain the orderly operation of the power sector.

Unlike Hunan and Jiangxi, Zhejiang can guarantee electricity supplies for the entire province. Some areas in Zhejiang have limited electricity use to promote energy conservation and reduce emissions.

This is a relatively detailed introduction regarding the current situation. The NDRC will continue to address peoples concerns through various means. Next, the NDRC and the NEA will guide power and energy companies to synergize their efforts and ensure winter power supplies. We will focus on the following aspects:

First, improve electricity generation capacity and update operations.

Second, increase the supply of thermal coal through multiple channels. We have asked major coal production areas and companies in Shanxi, Shaanxi, and Inner Mongolia Autonomous Region to step up production while ensuring safety. At the same time, we will coordinate shipping to guarantee sufficient power supplies.

Third, for places that face short-term power shortages, we will rearrange power supplies to ensure that household electricity use is not affected. In general, please believe that our ability to ensure a stable energy supply is not a problem. Thank you. 

China Daily:

The white paper outlines energy cooperation policies under the Belt and Road Initiative and the achievements made since 2012. Are there any new guiding philosophies in place for energy cooperation under the initiative? Thank you.

Zhang Jianhua:

Thank you for your question. It is fair to say that Chinas energy cooperation under the Belt and Road Initiative has achieved significant results. Currently, many major energy cooperation projects are in progress, multilateral and bilateral mechanisms are constantly improving, and exchanges in energy policies and technologies are becoming more frequent. All of these have played a positive role in promoting socioeconomic development in the Belt and Road countries.

The global economic recovery has become uncertain amid the COVID-19 pandemic. Many countries have adopted green development policies to promote post-pandemic economic recovery. Moreover, a transition to global clean energy is also accelerating. Given the new circumstances and challenges, we will uphold the principles of extensive consultation, joint contribution, and shared benefits; pursue open, green, and clean governance; step up efforts to achieve high-quality, people-centered, and sustainable goals, and; promote the superior development of international energy cooperation under the Belt and Road Initiative. 

On the one hand, we will engage in international cooperation for energy governance. We will uphold the principles of openness and inclusiveness so as to establish Belt and Road energy partnerships, promote mutually beneficial energy cooperation, and conduct joint research and exchanges. We will continue to strengthen cooperation with international organizations and multilateral mechanisms and engage in multilateral energy cooperation and exchange activities.

On the other hand, we will promote the high-quality development of energy cooperation programs. We will engage in the global energy transition and research, and promote cooperation with relevant countries in nuclear power, wind power, solar photovoltaic power, smart energy, and smart grid, as well as interconnectivity. We will also study policies to integrate green energy and green finance, and promote bilateral and multilateral programs. Intensified efforts will be made to promote third-party and multiple party cooperation so as to achieve synergies in energy cooperation among BRI countries. Thank you.

Xinhua News Agency:

China's new energy sector, such as the generation of wind power and solar photovoltaic power, has seen rapid development in recent years. However, there are still challenges when it comes to the consumption of new energy power. Are there any new measures to address the issue of large-scale new energy consumption? Thank you.

Zhang Jianhua:

I would like to invite Mr. Zhu to answer this question.

Zhu Ming:

Thank you for your question. It regards a very important topic. The biggest problem facing the development of new energy during the 13th Five-Year Plan period is the issue of consumption. Moreover, challenges posed by both consumption and grid access will emerge during the 14th Five-Year Plan period. Therefore, we must solve the problem of consumption. We must initially accelerate efforts to build a new power system that is suitable for the increased production of renewable energy, that is, a new generation of power systems, before undertaking the following steps.

First, we will make great efforts to establish intelligent power dispatch trading and operation mechanisms, promote the application of high-voltage direct current transmission, local smart grid, and micro-grid technologies, accelerate the construction of cross-provincial and cross-regional power channels, and give play to the overall function of the national power grid.

Second, we will step up efforts to implement the flexible transformation of traditional coal-fired power generating units. We will also accelerate the construction of flexible power sources such as pumped-storage power stations, natural gas peak-shaving power stations, and various large-scale power storage pilot projects so as to really improve the overall flexibility of the system.

Third, we will tap our potential for meeting energy demands and promote a smarter, more flexible, and higher-energy utilization of power by users so as to facilitate two-way smart interaction between source and load. 

We will also improve and implement guarantee mechanisms for renewable energy power consumption.

We will do this by first enhancing the responsibility shared by power suppliers and users in consuming renewable energy and step up efforts to incorporate such guarantee mechanisms into relevant laws and create legal liability.

Second, we will appraise the consumption of renewable energy across various sectors and incorporate our findings into an evaluation system of economic and social development for local governments.

Third, we will build up adjustment capabilities to coordinate energy use, improve market mechanisms, make great efforts to create new consumption models, and strengthen consumption supervision so as to establish mechanisms for accommodating power generated from clean energy sources in the long run.

Fourth, we will enhance the trading of green power certificates and the construction of the carbon market so as to further reflect the importance of renewable energy in terms of ecological and environmental protection, as well as explore new models for green energy consumption. Thank you.

Zhang Jianhua:

Let me add one more thing. In previous years, the cost of developing new energy, including wind and solar energy, was relatively high. Therefore, in order to encourage its development, governments had to provide subsidies. Thanks to the joint efforts of various parties in recent years, new energy technologies developed rapidly while the cost to do so has continuously fallen. In the future, the development of new energy will be determined mainly by the market and no longer requires government subsidies. Now then, the biggest problem is how to consume new energy power. Just as Mr. Zhu said, there is lots of work to be done and we are under great pressure. By 2030, the total installed generating capacity of wind and solar energy systems will reach 1.2 billion kilowatts and is expected to reach 460 million kilowatts by the end of 2020. The following years therefore will witness a significant number of large increments. Thank you.

Hong Kong Cable Television:

Mr. Zhang, you just mentioned that power outages occurred in Hunan and Jiangxi provinces. But as I know, there was also a power outage in Guangzhou in the early hours of today. Does this mean that power outages are likely to occur in other places? We also know that some factories in Jiangxi and Zhejiang provinces have had to close temporarily. Is there a timetable for them to resume work? Thank you.

Zhang Jianhua:

Thanks for your question. At present, the overall power supplies in our country can be guaranteed and the power outages that occurred in some places were a contingency. On the whole, our energy supplies in the country, including electricity supply, will not encounter major problems.

CNR:

Thank you. China had also previously experienced natural gas and power shortages and the country has been strengthening the establishment of a system linking energy production, supply, storage and sales. What measures have been taken in this regard? And what has been the effect? Thank you.

Zhang Jianhua:

I'd like to welcome Secretary General Zhao Chenxin to answer this question.

Zhao Chenxin: 

Thank you for your questions. The work you mentioned is an important task put forward by the Central Committee and the State Council in recent years. The ability to supply and guarantee energy can be enhanced through the establishment of a system linking energy production, supply, storage and sales. This system, as a large-scale project, is wide ranging. As such, I will briefly introduce the most pertinent issues and the progress we have made in this regard.

In terms of the coal industry: 

First, the industrial structure has been constantly optimized by deepening coal supply-side structural reforms in the coal industry. We have stuck to the principles of "constructing large units and restricting small ones and increasing the superior, while eliminating the inferior" in coal production. In addition, we have been significantly optimizing the industrial structure in a bid to achieve a giant leap forward in the ability to supply coal and its quality.

Second, measures have been taken to ensure more convenient and rational coal transportation, and transport capacity has been significantly improved. The main channels are under rapid construction and include such projects as the "West-to-East Coal Delivery" and "North-South Coal Transportation." The Haolebaoji-Ji'an Railway has also been completed and is now in operation. We have sped up the layout of dedicated railway lines linking coal production places to sales areas, while main ports and road-rail combined transport in logistics parks are developing in an orderly manner.

Third, the coal reserve capacity continues to increase. A batch of large-scale coal reserve bases are under rapid construction with corporate social responsibility reserves pressing ahead in an orderly manner and emergency support capabilities significantly raised.

Fourth, the market system has been promoted. We have established a medium- and long-term coal contract system to give play to the important role of "ballast stones." A national coal trading center has been completed and opened, and a modern market system for coal trading is gradually improving. We can see the progress made in establishing a system linking energy production, supply, storage and sales and its effects from the above four aspects.

In terms of the electricity industry:

First, the power production capacity is sufficient, and the installed capacity and power generation capacity rank first in the world. We have established a multi-power generation system featuring coordinated development between coal, gas, hydro, nuclear, wind and PV power. The clean energy industry is developing quickly and the proportion of non-fossil energy in primary energy consumption has gradually increased.

Second, the capabilities of power grid resource allocation have been significantly enhanced. Continuous improvements have been made to grid layout, power flow and smart grid, which can meet the multiple needs of grid-connection.

Third, the capability to adjust peak periods of power-usage and the system of peak reserves have been improved steadily. Constant progress and breakthroughs have been made in related technology, with industrial applications being increasingly upgraded.

Fourth, consumer-side electrification levels and management capabilities continue to improve. With demand for electricity rising nationwide, the management of power users has been further strengthened. Power consumption has leapt from a fast-growing stage to a high-quality growth stage, and reform of the electricity market system is gradually advancing.

In terms of the petroleum and gas industry:

First, promoting increased reserves and production. In recent years, the NDRC and the NEA have made huge efforts to stabilize the input to enhance oil and gas exploration.

Second, maintaining import supply. We have actively pressed ahead with diversified oil and gas imports by deepening international cooperation. We have advanced the construction and interconnection of oil and gas pipeline networks. A batch of pipelines including the northern and central sections of the China-Russia Eastern Route have been completed and put into operation.

Third, promoting the construction of storage facilities. We have accelerated the promotion of a multi-level petroleum storage system that combines government storage, corporate social responsibility storage, and production and operation inventory, which complement one another. We have improved the level of national petroleum reserves. Efforts have been made to strengthen the gas storage capacity for upstream supply companies, urban gas companies and local governments, while a number of large-scale gas storage facilities have also been put into operation. 

Fourth, improving market system. The China Oil & Gas Piping Network Corporation (PipeChina) was established on Dec. 9, 2019. The company has accelerated the formation of an "X+1+X" oil and gas market system featuring multi-subject and multi-channel supply of upstream oil and gas resources, a unified pipeline network for efficient collection and transportation, and full competition in the downstream sales market. We have strengthened the supervision of the oil products market, investigated and punished illegal operations such as unlicensed operations and substandard quality in accordance with the law, regulated market order, and advanced the healthy development of the industry.

My introduction to efforts in the coal, electric power and petroleum gas industries demonstrates that the direction of the system linking energy production, supply, storage and sales is in line with the realities of China's development, that it is correct, and that the results are remarkable. In the future, we will continue to do our best in the energy resources industry. That's all, thank you.

CGTN:

Just now, Mr. Zhang mentioned that China announced last year that it would strive to achieve carbon neutrality by 2060, which has undoubtedly sent a signal of green and low-carbon development to both international and domestic communities. What are China's specific measures to achieve low-carbon development? What are the biggest obstacles in regarding these goals? Thank you.

Zhang Jianhua:

Thank you for your question. The Fifth Plenary Session of the 19th CPC Central Committee put forward that during the 14th Five-Year Plan period (2021-2025), high-quality development will be the main theme for our economic and social development. The Proposals (Proposals of the CPC Central Committee for Formulating the 14th Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through the Year 2035) identify the tasks for promoting an energy revolution, building an intelligent and modern green infrastructure, accelerating green and low-carbon development, as well as how best to develop the smart energy system. To implement the guiding principles of the Fifth Plenary Session and promote high-quality energy development, we will focus on the following six areas during the 14th Five-Year Plan period.

First, the capacity for guaranteeing energy security will be enhanced. We need to accelerate the establishment of a diversified and secure energy supply system, ensure a dynamic balance between energy supply and demand, and continue to open up in a wider, broader, and deeper way to achieve energy security. Just now, Mr. Zhao also touched upon these goals.

Second, the transition to clean and low-carbon energy will be accelerated. China's non-fossil energy consumption accounted for 15.3% of total energy consumption in 2019 and is expected to reach 15.8% by the end of this year. During the 14th Five-Year Plan period, we will further innovate development methods, speed up the development and utilization of clean energy, advance non-fossil energy and natural gas to become the main driver for energy consumption increase and raise the proportion of clean energy consumption by a larger margin. China declared that it will boost the share of non-fossil energy consumption to around 25% by 2030, a significant increase that will mean over 70% of our expanded energy needs will mainly come from non-fossil energy in the future.

Third, a smart energy system will be established. We will accelerate the digital and intelligent upgrading of the entire energy industry chain, quicken the construction of smart energy demonstration projects, and speed up the growth of new energy models and businesses.

Fourth, energy projects will be carried out to benefit the public. In response to ordinary people's new expectations for a better life, we will continue to strengthen the construction of energy infrastructure, vigorously elevate urban and rural electrification levels, and significantly improve the energy utilization in production and living for the general public. In fact, energy use in China has improved significantly in recent years. Compared with developed countries, however, the public's energy consumption remains relatively low, with an average per capita electricity consumption of 730 kWh, in contrast to that of around 2,000 kWh in developed European countries.

Fifth, the energy revolution will be deepened. We will advance market-oriented reforms in the fields of electricity, petroleum, and gas; build a high-standard energy market system; press ahead with reforms to streamline administration and power delegation systems; improve regulation, and; upgrade services in the energy sector, improve the energy business environment, and further unleash the market vitality.

Sixth, rule of law in the energy sector will be improved. We will work to formulate energy laws, revise electricity and renewable energy laws, and other laws and regulations, as well as improve the related institutions and systems for implementing new energy security strategies in promoting the transition to clean and low-carbon energy.

Of course, what I have mentioned is just the main work and the specific tasks far exceed these. Because time is limited, I only introduced the six aspects above.

Cover News:

In recent years, significant progress has been made in the area of clean heating in northern China. Nonetheless, we also notice that people in some regions have reported problems such as the high price of clean energy and poor heating overall. What measures will be taken to promote and improve clean heating in northern China in the future? Thank you.

Zhang Jianhua:

Mr. Zhu will answer this question. 

Zhu Ming:

The National Development and Reform Commission, the National Energy Administration, and other departments have fully implemented General Secretary Xi Jinping's important instructions on promoting clean heating in northern China during winter and have established and improved the relevant policy systems and actively yet prudently promoted the work needed to be done so as to ensure a safe, warm, and clean winter for our people.

First, we rolled out a clean winter heating plan for Northern China (2017-2021), and its implementation has been very effective.

Second, we made arrangements for clean heating before every winter. We have set up the inter-ministerial joint committee for clean heating, created a clean heating report every 10 days during the heating season, and established mechanisms to coordinate coal, electricity, petroleum, and gas supply and transportation. We also worked to monitor and manage winter heating operations to find and solve relevant problems in a timely manner.

Third, the central government has financed trials to promote clean heating across northern China. A total of 43 cities, rolled out in three batches, have been supported by these pilot programs, with an accumulative investment of 49.3 billionyuan.

Fourth, we improved pricing with regards to replacing coal with electricity, clarified the price of replacing coal with natural gas, improved the pricing mechanism for heating, and reduced the cost of clean heating. In order to ensure a safe and reliable supply of electricity, we spared no efforts to strengthen the upgrading of distribution networks. The distribution transformer capacity per household in regions where coal is being replaced by electricity is generally higher than the 2000 VA standard for rural power grid upgrading. We organized power grid enterprises to uncover potential dangers in the supply and utilization of the coal-to-electricity power supply before the heating season, and optimized grid dispatch capacity to ensure a safe and stable power supply.

To ensure a reliable supply of natural gas, on the one hand, we have fully promoted the operation of some key projects that will lay the foundation to boost the supply capacity for natural gas. These include the development of the middle section (Changling-Yongqing) of the China-Russia east-route natural gas pipeline and the Wen-23 underground gas storage in central China,. On the other hand, we have done a good job in dispatching natural gas resources to meet ordinary people's needs. Meanwhile, we gave full play to PipeChina's dispatching role across the pipeline network to ensure a balance between natural gas supply and demand.

Hu Kaihong:

That's all for today's press conference. Thank you to Mr. Zhang, Mr. Zhao, and Mr. Zhu. Thank you all.

Translated and edited by Guo Yiming, Zhang Liying, Gong Yingchun, Zhang Rui, Zhang Tingting, Wang Zhiyong, Xu Xiaoxuan, Li Huiru, Fan Junmei, He Shan, Wang Qian, Wang Yiming, Yuan Fang, Cui Can, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Tang Yijun, deputy head of the Office of the Commission for Overall Law-based Governance of the CPC Central Committee, minister of justice, head of the National Legal Publicity Office

Yang Wanming, vice president of the Supreme People's Court, justice (second rank)

Yang Chunlei, deputy prosecutor general of the Supreme People's Procuratorate

Chairperson:

Hu Kaihong, spokesperson for the State Council Information Office

Date: 

Dec. 4, 2020

Hu Kaihong:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO).

Today marks the seventh national Constitution Day. We are delighted to be joined by Mr. Tang Yijun, deputy head of the Office of the Commission for Overall Law-based Governance of the Communist Party of China (CPC) Central Committee, minister of justice, and head of the National Legal Publicity Office; Mr. Yang Wanming, vice president of the Supreme People's Court, and justice (second rank); and Mr. Yang Chunlei, deputy prosecutor general of the Supreme People's Procuratorate. They will introduce programs of the 2020 national Constitution Publicity Week and the work of the Seventh Five-year Legal Publicity and answer your questions. First, let's give the floor to Mr. Tang.

Tang Yijun:

Friends from the media, ladies and gentlemen, good afternoon. Today marks the seventh national Constitution Day, and this week we are celebrating China's third national Constitution Publicity Week. From Nov. 30-Dec. 6, the Publicity Department of the CPC Central Committee, the Ministry of Justice, and the National Legal Publicity Office will be holding a series of publicity events across China as part of the national Constitution Publicity Week. This year, the publicity week has three main features.

The first feature is its distinctive and salient theme.

The Central Conference on Work Related to Overall Law-based Governance was successfully convened recently. The most important result of the conference was the establishment of Xi Jinping Thought on the Rule of Law and making it the fundamental guideline for overall law-based governance in the new era. This is a milestone event in the history of both the CPC and China. This year's national Constitution Publicity Week has a salient theme, which is to "fully study, promote and put into practice Xi Jinping Thought on the Rule of Law, and work hard to promote the spirit of the Constitution." The theme has been established to ensure the guiding role of Xi Jinping Thought on the Rule of Law in overall law-based governance, to increase public support of Xi Jinping Thought on the Rule of Law, and to raise public awareness of the spirit of the Constitution.

First, the publicity week is organized with a broad political vision. The Publicity Department of the CPC Central Committee, the Ministry of Justice, and the national Legal Publicity Office have jointly formulated a work plan for the national Constitution Publicity Week, which closely combines this year's publicity efforts of the Constitution with the study, promotion, and implementation of Xi Jinping Thought on the Rule of Law, as well as the study and implementation of the spirit of the Fifth Plenary Session of the 19th CPC Central Committee. It highlights the significance, rich implications, essence, and practical requirements for studying, promoting and putting into practice Xi Jinping Thought on the Rule of Law. This helps implement Xi Jinping Thought on the Rule of Law in every aspect and the whole process of overall law-based governance, leading to the practices of fully building a country of socialist rule of law.

Second, the publicity week is of a high standard and has high requirements. The Publicity Department of the CPC Central Committee, the Ministry of Justice, and the National Legal Publicity Office jointly held a launch ceremony for the 2020 national Constitution Publicity Week on Nov. 30. Officials from the Ministry of Education and other government bodies were invited to speak, and relevant works were announced during the event. The publicity week calls for effectively strengthening the purposeful study, promotion and implementation of Xi Jinping Thought on the Rule of Law in terms of one's thoughts, political consciousness, and actions, so as to help put into practice Xi Jinping Thought on the Rule of Law. It also calls for improving the precision, timeliness, and innovation capacity of Xi Jinping Thought on the Rule of Law and the publicity and educational efforts of the Constitution; and further contributes to the quality and effectiveness of this year's national Constitution Publicity Week.

Third, the publicity week is being promoted by high-profile government agencies. A symposium was held on the morning of Dec. 4 at the Great Hall of the People organized by the General Office of the National People's Congress (NPC) Standing Committee, the Publicity Department of the CPC Central Committee, and the Ministry of Justice. The theme of the symposium was "fully studying, promoting and putting into practice Xi Jinping Thought on the Rule of Law; Improving the Chinese socialist system of laws, at the heart of which is the Constitution." Li Zhanshu, chairman of the NPC Standing Committee, made an important speech during the symposium and proposed specific requirements accordingly.

The second feature is its diverse range of activities.

We have given full play to the application of all types of media such as newspapers, the internet, mobile apps, WeChat and Weibo accounts, and television. We have also adopted both traditional and modern approaches, focused on a tiered publicity strategy according to different audiences, and use understandable words to explain Xi Jinping Thought on the Rule of Law and the Constitution. It is becoming popular among the public to study, promote, and put into practice Xi Jinping Thought on the Rule of Law and the Constitution.

First, text messages on the topic have been sent. I believe many friends from the media will have received a message from the Ministry of Justice and the National Legal Publicity Office, saying: "Dec. 4 is the national Constitution Day. We should fully study, promote and put into practice Xi Jinping Thought on the Rule of Law; work hard to promote the spirit of the Constitution; and become good citizens by respecting, studying, abiding by and applying the law." We organized and coordinated mobile operators to send this message to 1.2 billion cellphone users. If you have been paying attention, you will notice that you received this text message.

Second, relevant TV programs have been produced. A program called "The Spirit of the Constitution; The Strength of the Rule of Law" will be broadcast on China Central Television (CCTV) at prime time on Dec. 4. The annual top-10 figures in the legal field in China will be revealed during the program. These personnel further demonstrate belief in the Constitution and the upholding of the rule of law from our officials and people, especially frontline police officers.

Third, relevant news reports have been published in newspapers. The People's Daily and Xinhua News Agency have published commentaries accordingly, and many newspapers and journals have set up national Constitution Publicity Week columns and published special editions to introduce the basic situation and progress being made on the topic. Major newspapers and journals also published a themed poster on Dec. 4 titled "Fully study and promote Xi Jinping Thought on the Rule of Law; Work hard to promote the spirit of the Constitution."

Fourth, relevant information has been posted online. Over 150 government websites at the central, provincial and ministerial levels — such as gov.cn, the Xuexi Qiangguo platform, and 12371.cn — have posted relevant news reports. Websites across China engaged in the popularization of law have introduced special coverage for the study and publicity of Xi Jinping Thought on the Rule of Law and the Constitution. News mobile apps, video websites, and e-commerce platforms have also started online publicity efforts, which has improved rates of both exposure and positive engagement.

Fifth, relevant events have been organized at different occasions and platforms. Government bodies across China have given full play to various law-popularization platforms and launched cultural events for the public concerning the rule of law. We have created a set of themed posters to help promote Xi Jinping Thought on the Rule of Law to the general public in a simple and understandable way. These posters will be exhibited at various law-popularization events across China, such as education centers for the rule of law and other themed venues including squares, parks, galleries, streets, and display boards. Themed advertisements will be broadcast in over 2,300 stations, 2,500 high-speed railway carriages, and other public spaces, to ensure that Xi Jinping Thought on the Rule of Law and the Constitution are well-presented and effectively cover a large area.

Third, we have taken coordinated actions.

We have organized and coordinated relevant central departments to take the lead in implementing the responsibility system of "whoever enforces the law shall popularize the law". We have expanded the audience reach of the campaign to study, publicize and implement Xi Jinping Thought on the Rule of Law and the Constitution among primary-level departments as well as the general public, and integrated it into rule of law practices, primary-level governance and social life.

First, we have launched Constitution publicity programs in rural areas. On Nov. 30, the Ministry of Agriculture and Rural Affairs and the Ministry of Justice jointly staged a "Constitution Publicity in Rural Areas" activity in Taiyuan city of Shanxi province to enhance rural residents' rule of law awareness and strengthen rule of law in rural governance.

Second, we have launched Constitution publicity programs in enterprises. On Dec. 1, the All-China Federation of Trade Unions held themed activities in Nanchang city of Jiangxi province. Based on enterprise efforts to inspire a culture of rule of law, and aimed at both the management and employees, the activities publicized the role of the Constitution and the laws in ensuring and regulating the development of the state-owned sector and also the non-public sector of the economy, as well as in safeguarding the rights and interests of workers, so as to promote the development of rule of law enterprises.

Third, we have launched Constitution publicity programs in residential communities. On Dec. 1, the Ministry of Civil Affairs and the Ministry of Justice jointly staged themed activities in Jinan city of Shandong province to provide education on rule of law and legal counseling to residents in terms of matters of public concern. The activities aimed at increasing the attraction and influence of the publicity work.

Fourth, we have launched Constitution publicity programs on campuses. Recently, the final round of the fifth National Students "Studying and Explaining the Constitution" Competition was held by the Ministry of Education. Today, we held "Read the Constitution in the Morning" activity to observe the seventh national Constitution Day, with over 60 million students reading parts of the Constitution simultaneously via the internet. Teachers and students in over 250,000 schools watched the live-streamed activity.

Relevant central departments have also launched themed publicity activities in Party and government organs, at military camps, and in the cyberspace. 

Though the Constitution Week has a time limit, the study, publicity and implementation of Xi Jinping Thought on the Rule of Law and the Constitution is a long-term task. We will institutionalize and regularize the task in order to publicize the Constitution on a daily or weekly basis.

I would like to express my gratitude to the media for their wide coverage of the Constitution Week publicity campaign and their lasting support for and supervision of the judicial administrative work and the work related to overall law-based governance. 

During this Constitution Week publicity campaign, courts and procuratorates at all levels across the country have undertaken much remarkable work. Now, together with Mr. Yang Wanming, vice president of the Supreme People's Court, and Mr. Yang Chunlei, deputy prosecutor general of the Supreme People's Procuratorate, I am delighted to answer your questions. Thank you.

Hu Kaihong:

Thanks, Mr. Tang. Now it's time for questions. Please identify the news organization you represent before raising your questions.

People's Daily:

The central conference on work related to overall law-based governance, which was held recently, established Xi Jinping Thought on the Rule of Law as the guideline for overall law-based governance. How should we combine the study, publicity and implementation of Xi Jinping Thought on the Rule of Law with law popularization to further promote the thought?

Tang Yijun:

Thanks for your question. Xi Jinping Thought on the Rule of Law serves as the fundamental guideline for overall law-based governance in China and our efforts to popularize public knowledge of the law. To study and publicize Xi Jinping Thought on the Rule of Law is our top priority in public legal education in the new era. As the period covered by the seventh five-year plan for increasing public knowledge of the law is drawing to a close and the planning of the eighth edition is underway, we will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and uphold Xi Jinping Thought on the Rule of Law as the overarching principle for law popularization in the new era. We will combine the study, publicity and implementation of Xi Jinping Thought on the Rule of Law with law popularization to ensure it is fully embraced by the people. We will focus on the following three aspects.

First, we will attach great importance to the education of key targets. Leading officials have always been the key targets in law popularization. In the campaign to study, publicize and implement Xi Jinping Thought on the Rule of Law, we should first of all focus on the "key few" and see that leading officials take the lead in studying and accurately grasping its gist, and resolutely implement the major decisions and plans on overall law-based governance adopted by the CPC Central Committee. We will ensure the full implementation of the system in which state functionaries study and use the law. We will ensure that Xi Jinping Thought on the Rule of Law becomes a focus for theory study groups of the Party Committees (leading Party members groups) at all levels, a key course at Party schools (administration institutes) and cadre colleges, and an essential part in leading officials' daily study, legal training, and annual assessment in order to continuously deepen their understanding, enhance their awareness of the rule of law and lay a solid theoretical foundation. We will encourage leading officials at various levels to assume responsibility in respecting, studying, observing and applying the law, and boost their capacity of adopting law-based thinking and approach in their job.

Youth has also been the key target in law popularization. Through implementing the Guidelines on Rule of Law Education for the Youth, we should integrate Xi Jinping Thought on the Rule of Law into school education, and make it part of the legal theory syllabus at universities. We should see that it is included in teaching materials, taught at class and embraced by students. Today, the country has established over 30,000 bases of legal education for youth, in which we will set up themed areas and pavilions for publicizing and studying Xi Jinping Thought on the Rule of Law to guide the young generation to resolutely forge ahead on the path of socialist rule of law with Chinese characteristics.

Second, we will make better use of the publicity platforms to improve the work. We have established the national "Smart Law Popularization" platform, pooling the resources of over 6,000 new media outlets across the country to form a new media matrix. The WeChat public account "China Law Popularization" has attracted over 15 million followers. As of today, more than 3,500 theme parks, 12,000 squares and 34,000 corridors have been set up throughout the country. A total of 95.7% of villages (communities) have established platforms for law popularization. The country has established 72 national bases for law popularization and education. We will make full use of those platforms to expound Xi Jinping Thought on the Rule of Law in a people-friendly fashion, through various integrated media means and channels, and using plain language. In this way, we will see that officials and the general public have a better understanding of the essence and the basic content and requirements of Xi Jinping Thought on the Rule of Law, and ensure this reaches a wider audience.

Third, we will match our actions to our words to ensure good implementation. The key to studying and publicizing Xi Jinping Thought on the Rule of Law is to match our actions to our words, and apply what one has learnt. It is necessary to transform scientific thinking into motivation for practice. We will implement Xi Jinping Thought on the Rule of Law throughout the process of popularizing public knowledge of the law in the new era, and fully embody it in the eighth five-year plan on enhancing public awareness of the Constitution and the rule of law. We will also fulfill our duty in raising public awareness of the law and cultivate belief in the rule of law throughout society, so as to make the rule of law a consensus and basic norm of society. The basic spirit and essentials of Xi Jinping Thought on the Rule of Law are mainly reflected in the 11 requirements put forward by General Secretary Xi Jinping at the central conference on work related to overall law-based governance, as well as his remarks on political direction, important status, work arrangements, key tasks, major relations, and important guarantees of overall law-based governance. To implement Xi Jinping Thought on the Rule of Law in the popularization work requires strengthening the CPC's overall leadership in the work to ensure its right direction, and emphasizing a people-oriented philosophy, so that the public feel the need for its content and praise for the approaches and outcomes. It requires more efforts to popularize the spirit of the Constitution and guiding the whole society to respect, study, abide by, safeguard and use the Constitution. It also requires emphasizing law-based governance to create a good legal environment for handling affairs according to the laws, seeking legal assistance when in trouble, and solving problems and resolving conflicts with the laws. It also requires implementing the responsibility program in which state law enforcement departments are responsible for strengthening public legal awareness, so that the popularization work can be effectively combined with science-based legislation, strict law enforcement and fair justice. It also requires publicizing our law-based governance to the outside world to establish the image of our country as one based on the rule of law. We should also place more emphasis on the "key few," by which we mean leading officials, and motivate officials to be role models in regard to respecting, studying, abiding by, and using the laws. Thank you.

China News Service:

As state organs for legal supervision, what are the key tasks of procuratorial bodies in implementing the Constitution and popularizing public knowledge of it? Thank you.

Yang Chunlei:

Thank you for your question. Constitution-based governance is important content of Xi Jinping Thought on the Rule of Law. As state organs for legal supervision, procuratorial organs are duty-bound to ensure the implementation of the Constitution. Procuratorial organs at all levels should take Xi Jinping Thought on the Rule of Law as the central guideline, adhere to our role specified in the Constitution, give full play to our functions of legal supervision, and take effective measures to promote the implementation of the Constitution.

First, thoroughly studying and implementing Xi Jinping Thought on the Rule of Law and the spirit of the Fifth Plenary Session of the 19th CPC Central Committee, and strengthening the awareness of the Constitution. Procuratorial organs should take the study and implementation as an important political task now and in the future with a high consciousness in political, legal and procuratorial terms. We should focus on safeguarding the national political and economic systems specified in the Constitution when fulfilling our duties. We should also adapt to major changes in the structure of criminal offences, conduct less arrests, and practice prosecution and detention with discretion, so as to minimize and resolve social tensions. Procuratorial organs need to implement the leniency system for suspects and defendants who cooperate fully, and actively resolve conflicts and promote innovations in social governance. We have published guiding cases of procuratorial organs performing their duties in accordance with laws to promote innovation in social governance, and encourage procuratorial organs at all levels to promote social governance in handling cases. We have also issued the No. 6 procuratorial recommendation of the Supreme People's Procuratorate on cyberspace governance to relevant administrative supervision departments, helping establish a sound cyberspace governance system.

Second, adhering to the role of procuratorial organs specified in the Constitution to serve and ensure high-quality economic and social development. Procuratorial organs give full play to functions of criminal, civil, administrative, and public interest litigations, and provide powerful judicial guarantees for economic and social development during the 14th Five-Year Plan period through effective efforts. In the fight against COVID-19, the Supreme People's Procuratorate has issued 14 guidelines or guiding opinions independently or together with other departments of the CPC Central Committee. By the end of September 2020, procuratorial organs across the country investigated and arrested 8,032 suspects involving 6,393 COVID-19-related criminal cases, and approved the arrest of 6,480 people in 5,335 cases. They examined and prosecuted 9,083 filings involving 12,280 people, and initiated 6,850 public prosecutions involving 8,682 people.

Third, fulfilling procuratorial duties with people at the center. We should effectively safeguard the rights of the people, comply with their new demands for a better life in the new era, and further emphasize the people-oriented philosophy when supervising cases handling. We have released the regulations for procuratorates on hearings for examining cases, and promoted public hearings for major, difficult and complex cases, so as to increase judicial transparency and strengthen supervision. We have also helped consolidate and expand the outcomes of poverty alleviation, and implemented the mechanism of rapidly returning property involved in poverty alleviation cases. The Supreme People's Procuratorate has promptly published typical cases of duty-related crimes in poverty alleviation, and promulgated the regulations on the rapid return of property involved in poverty alleviation-related criminal cases together with the Supreme Court and the Ministry of Public Security. We have also stepped up efforts in cracking down on corruption, bribery, abuse of power, false reports, false claims and embezzlement in poverty alleviation work. From January to September 2020, procuratorial organs across the country arrested 1,788 people and prosecuted a total of 5,060 people for crimes involving poverty alleviation funds and other crimes affecting poverty alleviation work. We have also promoted judicial assistance with great efforts, while highlighting the assistance to families who have become poor and fallen back to poverty due to legal cases.

Fourth, stepping up efforts in offering non-public sector equal protection, and fostering a sound business environment based on the rule of law. The non-public sector is an important part of the socialist market economy according to the Constitution. In view of that, we have offered non-public sector equal protection in accordance with the law by giving play to our procuratorial functions. We have renewed our concepts and offered equal treatment and protection to state-owned enterprises and private companies, domestic capital and foreign funds, and large, medium, small and micro businesses. We have also resolutely prevented and corrected the practice of differentiated and selective justice, in an effort to create an equal and orderly environment for the market economy.

Fifth, we combine the promotion and popularization of the Constitution with procuratorial work. Procuratorates at different levels have been pushing for regular and institutionalized learning and promotion of the Constitution through various means. They have promoted the spirit of the Constitution at companies, rural areas, government organizations, schools, communities and military camps as well as on the internet. The Supreme People's Procuratorate has leveraged the media matrix of the procuratorial system, both online and offline and both traditional media and new media, to promote and popularize the Constitution in a variety of ways. Procuratorates across the nation have realized full coverage of Weibo, WeChat and mobile application, and 94% coverage of portal websites. The Supreme People's Procuratorate has attracted 54.46 million followers and released more than 210,000 messages on its new media platforms including Weibo, WeChat and mobile application. The Supreme People's Procuratorate has carried out a new media live streaming campaign enabling the public to gain better understanding of the procurators doing frontline work, and for the latter to reach out to society online to popularize law. This live streaming campaign has achieved 290 million views online. Procuratorates at different levels have organized open day events in various forms. They have deepened publicity and educational efforts on Xi Jinping Thought on the Rule of Law and on the idea that the public should respect, learn, obey, safeguard, and make use of the Constitution on the platforms of WeChat, Weibo, and mobile application and by the means of examples of cases, animations, microfilms, public service ads and MVs. On Dec. 3, the Supreme People's Procuratorate hosted an open day event with the theme of "Learn Xi Jinping Thought on the Rule of Law and Enhance Legal Supervision in the New Era". For key groups including youth, procuratorates have attached much importance to educational activities aiming to promote and popularize the Constitution. In September 2018, Zhang Jun, procurator-general of the Supreme People's Procuratorate, accepted the offer to become the vice principal for rule of law at Beijing No. 2 Middle School, and has given lessons on rule of law at the school for three straight years. By the end of September 2020, a total of 33,000 procurators across the country, including over 3,200 procurator-generals at various levels, assumed similar roles in primary and middle schools. In the second half of 2019, the Supreme People's Procuratorate organized a nationwide lecture tour to promote the rule of law at campuses, giving a total of 96,500 lectures to 80.5 million teachers and students at 108,000 schools. So, this is something that we have kept doing in recent years. Let me stop here. Thank you all!

Cqcb.com:

General Secretary Xi Jinping stressed at the central conference on work related to overall law-based governance that the legal popularization work should pay attention to effectiveness and be well-directed, and law-related education for the youth should be enhanced in particular, and that the legal governance awareness and knowledge of the whole nation should be improved continuously. So, how is the situation of legal popularization and law-based governance currently progressing in China? What is the plan for the future? Thank you. 

Tang Yijun:

It is a great deed in the human history of rule of law to carry out legal popularization among the whole nation in such a big country with a 1.4 billion population, and to put the law into the hands of the people and make them have faith in the law. This fully embodies the system of socialism with Chinese characteristics, and is a major measure for strengthening prevention, addressing the root causes of issues and advancing law-based governance. In nearly 35 years, the work of legal popularization among the whole nation has recorded historical achievements. Especially, after the 18th CPC National Congress, legal awareness has been remarkably enhanced in the whole of society, and the level of law-based social governance has noticeably improved, which can be demonstrated in five aspects:

First, the Party's comprehensive leadership on legal popularization has been significantly enhanced. The CPC Central Committee with Comrade Xi Jinping at its core attaches great importance to legal popularization work. General Secretary Xi Jinping presided over group study sessions of the Political Bureau of the CPC Central Committee many times with the rule of law being the theme, setting an example for the Party and the society. The CPC Central Committee made scientific top-level design for legal popularization work and built the general framework for legal popularization in the seventh five-year public legal education plan period (2016-2020). After the establishment of the Commission for Law-based Governance under the CPC Central Committee, a law observance and education coordination team was set up under the Commission, with which the Party further enhanced the overall planning, coordination and implementation of law observance and education efforts. 

Second, the legal popularization work has been shaped to meet the requirements of the overall situation and to serve the general public, achieving remarkable results. Focusing on the core tasks of the Party and the state and the real problems and difficulties that concern the people, we continued to carry out activities with the theme of "legal popularization serving the overall situation". Suddenly faced with the COVID-19 epidemic, we carried out special activities to promote the rule of law with the theme of "rule of law in epidemic prevention and control", and organized the compilation of epidemic prevention and control related e-books and posters for free public download and use. We continued to deepen the integration of poverty alleviation with education and with the rule of law, and carried out a special action for poverty alleviation with the help of the rule of law to ensure legal popularization and law-based governance can play an important role in the fight against poverty. We also organized the compilation of a series of books for legal popularization to help the fight against poverty. We made efforts to resolve outstanding legal issues faced by people in need, offering strong support for winning the fight against poverty through the rule of law. 

Third, we have broadly implemented a responsibility system for legal popularization in which who enforces the law should also popularize the law. By implementing this system, we advanced innovation in the concepts, systems and practices of legal popularization throughout the nation. The National Legal Publicity Office compiled and published two batches of lists of legal popularization responsibilities for more than 50 central Party and state departments, seeking to have relevant departments actively encourage public participation, listen to opinions widely and make timely releases in the process of drafting and finalizing laws, regulations, rules and judicial interpretations. We have embedded the legal popularization work in the whole process of law enforcement. We inform private parties of the legal grounds for administrative law enforcement as well as legal relief measures. The judicial authorities explain and publicize the law through the whole process of handling various cases, taking full use of legal documents for interpreting the law and conducting legal popularization work through live streaming court trials and other means to offer a vivid, directly perceived experience. 

Fourth, we have deepened efforts to promote rule of law in rural areas. We strengthened the promotion of rule of law in rural areas as the groundwork for implementing the rural revitalization strategy and progressing overall law-based governance. We deepened efforts in building national model villages and communities of democracy and rule of law, and raised the level of law-based rural governance. We have now reviewed all of the designated national model villages and communities of democracy and rule of law and kept 2,899 of them, and we are undertaking dynamic management to ensure their quality. We launched a program to enhance legal literacy in rural areas and made efforts to guide farmers and the officials and the general public of rural areas to abide by the law and resort to legal approaches when encountering problems, in a bid to help pave the "last mile" of law-based governance.

Fifth, rule of law education has been incorporated into the national education system. We have worked with the Ministry of Education and formulated an outline of rule of law education for young people to further promote this topic in this segment of the population. At present, courses are offered at primary and secondary schools and the knowledge on the rule of law now has a certain weight in the college entrance examination. Since 2016, a course on ethics and the rule of law has been in place across the nation's compulsory education and special booklets on the subject have been offered for the sixth- and eighth-grade students. Local authorities are giving full play to the role of the "second classroom" and guiding students to participate in rule of law practices. Most of the nation's primary and secondary schools have been equipped with deputy principals and counselors of the rule of law, with 15 of the nation's provinces, autonomous regions and municipalities having realized full coverage.

At the central conference on work related to overall law-based governance, General Secretary Xi Jinping stressed that we should make more efforts in legal education in a targeted and effective way, and strengthen the subject among young people in particular so as to raise public awareness and knowledge of the rule of law. This identifies the pressing problems of public legal education and determines a direction for us to be innovative in this work. We will thoroughly study and implement the principles from General Secretary Xi Jinping's major addresses, focus on promoting public legal education in a more targeted and effective way, further carry out the legal education in a classified, orderly and effective manner with a focus on young people in the coming eighth five-year legal education program, and endeavor to improve public knowledge of the rule of law so as to promote the all-around development of this aspect by staying true to our shared ideals, blazing a new trail and improving its quality and efficiency.

First, we will carry out legal education in a targeted way. We will respond to the public need and implement targeted legal education to shift legal education from a "flooding" approach to the public to "dripping" in regard to different targets. We will apply new media and new technologies to intelligent legal education, making the internet — the biggest variable — the biggest increment in the innovative development of the legal education.

Second, we will strengthen educational integration. We will further improve and implement the Outline of the Rule of Law Education for Young People, promote the integration of Xi Jinping Thought on the Rule of Law into school education, strengthen the training of teachers for rule of law education, deepen efforts in running law-based schools, and foster young people's awareness of rules and rule of law habits through education and guide, practice and institutional guarantees.

Third, we will improve people's knowledge of the rule of law. We will make it a strategic priority of enhancing the country's soft power to raise this public knowledge and launch campaigns to improve their awareness of the rule of law, encourage the whole society to respect, abide by and use the law, and make the rule of law a social consensus and basic norm. Thank you.

CNR: 

As we know, China Judgments Online plays an important role in judicial practices, promoting both justice via openness and judicial big data research. I have a question for Mr. Yang. In the future, what efforts will be made to help the public deeply understand relevant legal provisions and main points of judicial documents during the legal education process? Thank you.

Yang Wanming:

Thank you for the question. The launching of China Judgements Online promotes full disclosure of judicial documents on the internet. This is one of the SPC's important judicial disclosure moves to implement the CPC Central Committee's strategic plan of overall law-based governance, adhere to the administration of justice for the people and maintaining judicial fairness, and respond to the new demands and expectations of the people in the current information age. The scale and scope of the move is unprecedented. Launched in July 2013, China Judgements Online has so far released more than 107 million copies of written judgments and attracted 52.4 billion visits, with an average daily increase of more than 80,000 copies. Just as the CNR reporter has said, online access to judicial documents is an important way to promote justice by releasing judgements online. It can effectively guarantee the people's rights to be informed, to participate, to express and to supervise so that the public credibility of the judiciary will be enhanced accordingly. Meanwhile, the judgements can play a role of education, evaluation, publicity and guidance. They are a vivid textbook for school legal education and the best material for legal research. The massive judgements made public by the people's courts are valuable judicial resources and the embodiment of the vivid practice of overall law-based governance. They are helpful for legal practitioners to study and research, as well as for the public to understand the trial work of the people's courts, anticipate the judgment results, abide by the law and avoid risks. 

With the continuous development of the economy and society, people's awareness of the rule of law has been further enhanced and their needs for justice have become more diversified and the expectations for judicial openness have also increased. For judges, it is both a challenge and a responsibility to issue written judgments, make them public online, and accept the public's supervision. People's courts will continue to promote the publicizing of written judgments and provide effective judicial services for advancing economic and social development. The specific measures are as follows:

First, by constantly advancing information technology for publicizing of written judgments, more intelligent and humanized services will be provided to all sectors of society. China Judgments Online website will be further upgraded and improved, making queries and retrieval more convenient for users and provide a friendlier interface, faster responses, and offer more intelligent and humanized services. We will optimize the automatic linkage among the first, second, and retrial documents of the same case. Based on retrieval results, the system will automatically list documents of relevant cases as well as related legal provisions. It will also prioritize both the documents of instructive cases and typical cases of the Supreme People's Court and list exemplary written judgments on the homepage of the website so as to better serve the general public.

Second, we will constantly strengthen the interpretation and reasoning of the written judgments so as to make them more authoritative. We will steadily promote the reform on judgment writing, which will refine the focus of disputes and spell out the main points of the court's judgments in plain language. We will classify the written judgments into complex ones and simple ones in accordance with the nature and trial-level of the cases. We will further intensify reasoning of written judgments for first-instance cases that contain disputes among parties, complicated legal relationships, or are of high public interest, all second-instance and retrial cases, as well as the cases that are discussed and decided by the judicial committee, so as to enhance their credibility.

Third, we will continue to deepen and explore the utilization of written judgments resources and promote data sharing, cooperation, and exchanges with other departments. We will continue to adhere to the principle of "big data, big pattern, and big service." We will also continue to explore, integrate, and utilize written judgments resources using broader means and at deeper levels in order to fully realize the potential value of judicial trial data resources. We will strive to make sure cases with similar scenarios and facts are approached in the same way and carry forward standardization of sentencing by analyzing massive data and provide important references for the scientific decision-making of the Party, governments and people's courts through in-depth analysis of the development trend of various disputes.

Those are my answers. Thank you.

CCTV News:

My question relates to a recent incident that concerns the rule of law, specifically, the predicament of long-term rental apartment brand Danke Apartment and the public concern it has caused. The operator of apartments defaulted on the landlords' rent, which led to many tenants being evicted. Some tenants also face default risks because they have paid their rent in advance with loans. We have noticed that statistical data online show several long-term apartment rental companies are found in similar breaches of contract as of late. What comments do the judicial authorities have on this? And what measures will be taken to safeguard the legitimate rights and interests of the relevant parties? Thank you.

Yang Wanming:

I would like to thank you for your concern for the judicial work. I have also seen the relevant media reports. As far as I know, local authorities and related departments are handling these issues in accordance with the law and regulations. If it becomes a legal case and enters the judicial process, people's courts will conduct the trial strictly in accordance with the law. The courts will take facts as the basis and law as the criterion and protect the legitimate rights and interests of the citizens and legal persons in accordance with the law. Thank you.

Hong Kong's Bauhinia Magazine:

Mr. Tang, what activities will be held in Hong Kong during this year's National Constitution Publicity Week? Could you introduce the exchanges and cooperation between the Chinese mainland and Hong Kong in the judicial field in recent years? Thank you.

Tang Yijun:

Thank you for your question. The Hong Kong Special Administrative Region (HKSAR) is an inalienable part of the People's Republic of China, and so, of course, the Chinese Constitution applies to the HKSAR. The Constitution and the Basic Law of the HKSAR together form the constitutional basis of the HKSAR. The Decision adopted at the Fourth Plenary Session of the 19th CPC Central Committee stressed that "education in regard to the Constitution, the Basic Law and China's national conditions, history and culture should be strengthened in Hong Kong and Macao, particularly among the civil servants and the young people, so as to improve national consciousness and the patriotic spirit of our compatriots in Hong Kong and Macao." The relevant departments of the Central Government have always strongly supported and actively cooperated with the HKSAR government and all sectors of society in organizing various forms of publicity and education activities concerning the Constitution and the Basic Law. This year, the HKSAR continued to carry out a series of publicity activities such as holding symposia to mark the National Constitution Day. This year's symposia were hosted for the first time by the HKSAR Government and a specific webpage was created. The Constitution has been promoted among primary and secondary school students in an all-round way. Recently, an online question-and-answer contest related to the National Constitution Day in 2020 was held to enhance student awareness.

In recent years, the exchanges and cooperation between the Chinese mainland and Hong Kong in the judicial field have been constantly deepened, which is mainly reflected in the following aspects:

First, judicial cooperation and exchanges have been gradually enhanced. In recent years, the Ministry of Justice has maintained and deepened communication with the Department of Justice, the Correctional Services Department, the Law Society, Association of China-Appointed Attesting Officers Limited, as well as other judicial and legal organizations and personnel in Hong Kong, and completed works related to judicial examinations for Hong Kong law students and their internships in the mainland, providing a guarantee for deepening collaboration on the rule of law in the Greater Bay Area.

Second, the policy of opening legal services has been steadily improved. In Jan. 2019, the Ministry of Justice and the Department of Justice of Hong Kong signed the "Minutes of the meeting on further deepening legal services cooperation between the Chinese mainland and Hong Kong", clarifying the new measures taken by the mainland to open its legal services to Hong Kong. This past August, the 21st Session of the Standing Committee of the 13th National People's Congress (NPC) adopted a decision by the NPC Standing Committee authorizing the State Council to carry out trials of Hong Kong and Macao legal practitioners acquiring mainland professional qualifications and practicing law in nine mainland cities within the Guangdong-Hong Kong-Macao Greater Bay Area. In October, the General Office of the State Council issued the measures for conducting these trails. At present, the Ministry of Justice is actively yet prudently promoting the relevant pilot work.

Thirdly, the interregional judicial assistance system has gradually taken shape. This year marks the 30th anniversary of the promulgation of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China and the 20th anniversary of the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region being effective. The mainland and Hong Kong have creatively developed an interregional judicial assistance system with Chinese characteristics. The system has eight judicial assistance arrangements as the pillar and several judicial documents as the supplement, enriching the practice of "one country, two systems".

That's all. Thank you.

Hu Kaihong:

Because the time is limited, we will only be able to take one more question.

CRNTT:

The Civil Code will come into force on Jan. 1 next year. What work has been done in the study, publicity and implementation preparation of the Civil Code, please? Thank you.

Tang Yijun:

Thank you for your question. The study, publicity and implementation of the Civil Code is of great significance in building rule of law in China. The Ministry of Justice and the National Office for Law Popularization have made the study, publicity and implementation of the Civil Code a priority, and carried out relevant work in a swift and solid manner. We have advanced the work mainly from the following three aspects.

First, we have grasped the focus and incorporated the Civil Code into the general structure of the rule of law.

We take the implementation of the Code as an important task of deepening comprehensive law-based governance, and have integrated the implementation into the general plan of the latter. We also take the Code's implementation as an important tool to promote the construction of a law-based government, as a significant way to build a law-based society, and as a critical part of rule of law inspection work. We have integrated the Code's implementation into legislative work, law enforcement, judicial services, law observation and publicity, etc., promoting the formation of an efficient, balanced and coordinated work system for the study, publicity and implementation of the Civil Code.

Some time ago, the Commission for Overall Law-Based Governance of the CPC Central Committee organized a special inspection of local CPC committees and governments on their implementation of the Central Committee's decisions and plans for comprehensively governing the country in accordance with the law. We took the in-depth learning, publicity and implementation of the Civil Code as an important part of the inspection. Not long ago, we reviewed and evaluated the work of the Seventh Five-Year Legal Publicity Program. On the basis of organizing various departments in all localities to conduct self-examination, we carried out spot checks in some provinces (autonomous regions, municipalities), and one of the key contents of the checks was how the Civil Code was learned and publicized. These inspections and checks have strongly promoted the local departments concerned to accurately understand a series of new provisions, new concepts and new spirit of the Civil Code, and advanced the study, publicity and implementation of the Code across the country.

Second, focus on priorities to ensure the completion of key tasks.

Strengthening coordination. Eight departments, including the Ministry of Justice, the National Office for Law Popularization, and the Publicity Department of the CPC Central Committee, have jointly issued a circular on a campaign to study and promote the Civil Code. The campaign aims to help the people boost awareness of observing the law, develop a habit of turning to legal services when in trouble, and improve their ability to solve problems with legal knowledge. We urge central government departments to include the Civil Code into their list of duties for law popularization and to actively implement a program in which state law enforcement departments are responsible for strengthening public legal awareness.

Concentrating on major concerns. The popularization of the Civil Code should focus on responding to people's concerns and meeting public demands. We have organized officials of related departments to produce three open online courses on the Civil Code and published them online. We have made publicity films and posters, and promoted them in public places. We have also published handbooks containing quizzes and illustrations for the public to study the Civil Code. All local authorities, as well as relevant departments and agencies, have carried out publicity and education activities to promote the Civil Code in enterprises, in rural areas, in Party and government organs, on university campuses, in residential communities, at military camps, and online.

Innovating ways of promoting the Civil Code. We've taken a results-oriented approach to make the popularization of the Civil Code more effective and more relevant to people's daily lives. We launched a lecture series from the day the Civil Code was adopted, which includes 12 live-streamed lectures. It was proved to be very popular online, being viewed more than 10 million times on one platform alone. The book compiled from the lectures also found popularity among Party and government officials as well as the public. We organized a quiz on the knowledge about the Civil Code in the app "Xuexi Qiangguo," which has been taken by approximately 100 million people. We promoted the Civil Code through multiple media channels such as newspapers, the internet, apps, WeChat, Weibo, and TV, thus creating a positive atmosphere.

In the campaign to popularize the Civil Code, members of the Political Bureau of the CPC Central Committee have set a good example and ordinary people have taken an active role. Multiple media channels have been adopted and local authorities and communities have made concerted efforts. Thanks to various measures and effective coordination at different levels, the campaign has delivered fruitful outcomes in mobilizing more people to study, promote, and implement the Civil Code. General Secretary Xi Jinping emphasized the publicity of the Civil Code as a priority in the work of law popularization during the 14th Five-Year Plan period (2021-2025). The eighth five-year plan on raising public legal awareness will also be carried out from 2021 to 2025. We will increase efforts to popularize the Civil Code during the period and organize promotional activities to instill the spirit of the law.

Third, reinforce critical areas to ensure the implementation of the Civil Code.

First, enhancing scientific legislation. We are asking professionals to evaluate existing administrative regulations, rules, and normative documents, and to promote work regarding the enactment, revision, abolition, and interpretation of those inconsistent with the Civil Code. We will press ahead with enacting the supporting laws and regulations and improve our work in reviewing administrative regulations and normative documents to ensure that they conform with the Civil Code. We will accelerate our efforts to establish an institutional system with the Civil Code at the center, and resolutely uphold the uniformity, sanctity, and authority of China's legal system.

Second, strengthening law enforcement and judicial justice. In work regarding administrative rights determination, administrative licensing, administrative reconsideration, the execution of punishment, and compulsory isolation for drug rehabilitation, we will pay more attention to protecting the legitimate rights and interests of individuals, legal entities, and unincorporated organizations, as well as strengthen the protection of civil law rights. The administrative organs of justice will earnestly perform their duties of supervising and coordinating administrative law enforcement to ensure that the law is employed in a strict, procedure-based, impartial, and civil manner. We will handle administrative reconsideration cases in a timely manner, resolutely correct administrative agencies' violation of the parties' legitimate rights and interests, and safeguard people's rights and interests entrusted by the Civil Code in accordance with the law.

Third, improving public legal services. We will give full play to the role of professional legal institutions, including law offices, notarial institutions, and judicial expertise institutions in the appropriate application of the provisions of the Civil Code. We will make good use of multi-party dispute settlement mechanisms, such as people's mediation and arbitration. For civil disputes involving marriage, contracts, and inheritance, we will promote the role of mediation in their settlements and arbitration in accordance with the Civil Code. We will improve legal aid work and use the Civil Code to help people in need to protect their rights and interests so that they feel that justice is served throughout all legal services. Thank you.

Hu Kaihong:

Today's press conference ends here. Thanks to the three speakers. Thank you, everyone.

Translated and edited by Liu Qiang, Zhang Liying, Yan Xiaoqing, Huang Shan, Xu Xiaoxuan, Wang Zhiyong, Li Huiru, Wang Qian, Zhu Bochen, Wang Wei, Duan Yaying, Yuan Fang, Liu Sitong, Yang Xi, Zhang Jiaqi, David Ball, Tom Arnstein, and Geoffrey Murry. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers: 

Zhao Zeliang, vice minister of the Cyberspace Administration of China 

Zhu Guoxian, member of the Standing Committee and director of the Publicity Department of the CPC Zhejiang Provincial Committee 

Sheng Yongjun, secretary of the CPC Tongxiang Municipal Committee in Zhejiang province 

Chairperson: 

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date: 

Nov. 2, 2020 

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to the State Council Information Office (SCIO) press conference. The World Internet Conference · Internet Development Forum will be held in Wuzhen, Zhejiang province, from Nov. 23 to 24. To brief you on progress, we have invited Mr. Zhao Zeliang, vice minister of the Cyberspace Administration of China, Mr. Zhu Guoxian, member of the Standing Committee and director of the Publicity Department of the CPC Zhejiang Provincial Committee, and Sheng Yongjun, secretary of the CPC Tongxiang Municipal Committee in Zhejiang province. They will explain the overall situation and the status of preparations for the forum and answer your questions. 

Now, I will give the floor to Mr. Zhao Zeliang. 

Zhao Zeliang: 

Thank you. Friends from the media, good afternoon. Welcome to today's press conference. The fifth plenary session of the 19th CPC Central Committee just concluded. Entrusted by the organizing committee of the World Internet Conference, I am delighted to brief you on the World Internet Conference · Internet Development Forum. 

The World Internet Conference · Internet Development Forum, with the theme of "Digital Empowerment Creates a Better Tomorrow: Building a Community with a Shared Future in Cyberspace," will take place in Wuzhen, Zhejiang province, from Nov. 23 to 24. During the same period, other activities including the Release of World Leading Internet Scientific and Technological Achievements in 2020, the Light of Internet Expo, and the "Straight to Wuzhen" Global Internet Competition, will also be held. 

The World Internet Conference has been successfully held for six years and has drawn great attention from the international community. Its influence has increased day by day. Since the beginning of this year, the COVID-19 pandemic has spread globally, and the international situation has undergone profound changes. In this context, it is particularly important to uphold the concept of a community with a shared future in cyberspace and strive to promote the development of global cyberspace towards a more inclusive, balanced and win-win direction. Given the changing situation and unchanged principles, we are actively exploring new models and new paths for organizing the World Internet Conference so as to show Chinese approach, wisdom and China's responsibility for advancing internet development and governance in a multifaceted and multi-dimensional way. 

Compared with previous years, there are three new changes in this year's forum. First, the format of the forum has been changed. We decided to hold the "World Internet Conference · Internet Development Forum" in the name of the World Internet Conference organizing committee, instead of organizing the 7th World Internet Conference. Second, the scale of the forum has been adjusted. Against the background of the COVID-19 pandemic, the number of guests, sub-forums and the conference duration have all been revised. The forum is expected to be "small-scale but significant" and "novel and lively." Third, there are new ways to participate. Various activities will be carried out on site and via video link. A live scene will be set up in Wuzhen, and guests who cannot attend the event in person will be able to participate online. 

While actively adapting to the changing situation and proactively innovating for changes, the style and principles of this year's World Internet Conference remain unchanged. 

First, it will focus on the theme and promote further cooperation. "Building a community with a shared future in cyberspace" has been a consistent theme of the World Internet Conference. The forum this year will fully implement General Secretary Xi Jinping's important thoughts on building China's strength in cyberspace, earnestly focus on General Secretary Xi's proposal to build a community with a shared future in cyberspace, and continuously establish a global platform promoting connectivity between China and the rest of world and a Chinese platform for global internet to be shared and governed by all. Under the principles of openness, equality, mutual trust, and win-win, we will work with the rest of the world to facilitate a global digital economy, promote economic recovery, and join hands with all parties to bring more vitality to the community with a shared future in cyberspace. 

Second, it keeps pace with new trends and aims to present creative ideas. Maintaining its high-end positioning, this year's forum will consist of one main forum and five sub-forums, providing platforms for exchanges of global, forward-looking, and strategic ideas, as well as leading and inclusive insights. Turning to content, high-end forums will continue to be held, including the "International Norms in Cyberspace: Practices and Explorations Forum," the "Belt and Road Forum for International Cooperation on Cyberspace," the "Artificial Intelligence Forum," and "Innovation and Breakthrough in Industrial Internet Forum." The "Youth and Digital Future Forum" will also take place to attract attention to the development and growth of the younger generation. Outstanding youth representatives will be invited to talk about the responsibilities and accountability of young people in the digital age. As for sideline activities, about 15 cutting-edge achievements of 2020 will be presented at the Release of World Leading Internet Scientific and Technological Achievements. The Light of Internet Expo will focus on the latest development trends and cutting-edge technologies of the internet around the globe and showcase world-leading and innovative technological achievements, products and applications. The "Straight to Wuzhen" Global Internet Competition will showcase the digital technology application in anti-pandemic efforts and internet innovation achievements. Ten teams with innovative projects from all over the world will compete in the finals, showing the vitality of innovation and entrepreneurship. 

Third, we will promote cooperation through concerted efforts. The forum will actively promote cooperation with international organizations, industry associations, technology communities, and global think tanks, pooling wisdom, bridging differences, strengthening mutual trust, facilitating more consensus and outcomes for building a community with a shared future in cyberspace, and further advance the goals set out in Wuzhen. In addition, the forum will also release the World Internet Development Report 2020 and China Internet Development Report 2020, which will comprehensively and deeply analyze the trend of internet development in the world and in China, and provide lessons and intellectual support for global internet development and governance. 

Dear friends, there are merely 20 days to go before the 7th World Internet Conference · Internet Development Forum opens. The preparatory work for the forum is now underway in an orderly manner as planned. We will strictly implement the requirements for regular epidemic prevention and control, and host a more distinctive and wonderful forum in a safe, frugal and efficient manner. 

Thank you. 

Shou Xiaoli:

Thank you, Mr. Zhao. Next, the floor goes to Mr. Zhu. 

Zhu Guoxian:

Thank you. Good afternoon, friends from the media. It gives me great pleasure to come to the press conference hall of the State Council Information Office once again a year on and brief you on this year's World Internet Conference · Internet Development Forum. On behalf of the Zhejiang provincial committee of the CPC and Zhejiang provincial government, I would like to take this opportunity to sincerely invite all friends, both old and new, to meet in Wuzhen for the grand gathering and discuss the new digital future. 

During his visit to Zhejiang this spring, General Secretary Xi Jinping set a new goal and new positioning for the province, that is, to strive to be an important window for representing the great strength of the socialist system with Chinese characteristics in the new era. The fifth plenary session of the 19th CPC Central Committee has made major decisions and arrangements for enhancing China's strength in cyberspace and digital technology. As a major province of internet development and digital economy, Zhejiang will use the opportunity to host the World Internet Conference to lead trends of the times, contribute to human progress, create a better life, and empower future development. 

Just now, Mr. Zhao briefed on the changes in relevant activities of this forum. As the host city, we will never change our philosophy of making each session better than the previous, nor will we change our firm faith in jointly building and sharing the internet and our unremitting pursuit to make people's lives better with the internet. 

We will continue to apply intelligent technologies in the conference and ensure it a safe and successful event. We will put people and their lives first throughout the preparation, strictly implement the requirements for regular epidemic prevention and control, make full use of our successful experience, and establish a prevention and control mechanism features full chain, full coverage and checklist management to realizes cientific prevention and closed-loop management. Guest registration, transportation, and conference services will adopt technologies such as non-contact face scanning, QR code passes, and infrared sensors to improve our intelligent services. Adopting the form of"online + offline", we will set up live broadcasting platforms and open an online expo. With the help of 5G, cloud computing, artificial intelligence, and other technologies, both online and offline activities will be presented simultaneously to holda smartand safe conference.

We will continue to keep to the right path and make innovations to present a concise but wonderful forum. The World Internet Conference has witnessed great changes amid the backdrop of the ancient town with a thousand years of history. We aim to make the forum a world internet conference that continues throughout the year. Those changes will promote further integration of the internet elements into the cultural genes of Wuzhen. A new exhibition will showcase the latest achievements in internet technologies worldwide on a regular basis. The country's first online and offline integrated public ecological park, which features new infrastructure and 5G plus intelligent interactive experiences, will be established. The park is designed to bea cloud agricultural experimental field, vividly displaying changes brought by the internet through immersive experiences and interactive scenes. Over 100 leading enterprises in the industry, including Alibaba, Tencent, Huawei, and Epson, will take part in the exhibition and present a batch of their latest scientific and technological achievements. Leading figures in the internet field in China and abroad will attend sessions of the forum or deliver a speech via video link, presenting a feast of ideas for internet-led changes. 

We will focus on how digital technologies have empowered the economy and make the forum a success. The previous six sessions of the World Internet Conference have offered strong driving forces to the digital economy of Zhejiang province and the development of the whole province. The province's GDP grew by 2.3% year on year in the first three quarters of 2020. The value-added of core industries of the digital economy increased by 14.4% year on year, making them the main engine of the province's economic growth, the major driving force in transformation and upgrading, and the main field in entrepreneurship and innovation. In particular, consumers who stayed at home during the epidemic have stimulated the development of the online economy. In the first three quarters, online retail sales through e-commerce in Zhejiang province reached 1.3968 trillion yuan, up 12.1% year on year. Meanwhile, online spending among residents in the province reached 719.4 billion yuan, up 9.1% year on year. Digital technologies are also profoundly changing Zhejiang people's daily lives.The public now enjoy increasingly better access to government services. The City Brain, a smart city platform aiming to improve urban management, has made cities smarter and life better. 

Friends from the media, Zhejiang will take this opportunity to study and implement the spirit of the fifth plenary session of the 19th CPC Central Committee, and faithfully implement the strategy to give further play to Zhejiang's advantages in eight areas and push forward measures across its eight aspects. We will strive to create an important  window, and be a good host for the grand event. We have the confidence to present you with a unique Wuzhen. Thank you again for your attention and support for Zhejiang. Let's meet in Wuzhen. Thank you. 

Shou Xiaoli:

Thank you, Mr. Zhu. Now, the floor is open for questions. Please identify your news outlet before you raise a question. 

CCTV:

The theme of this year's World Internet Conference · Internet Development Forum is "Digital Empowerment Creates a Better Tomorrow: Building a Community with a Shared Future in Cyberspace." What are the considerations behind this theme? Thank you. 

Zhao Zeliang:

Just as I mentioned in my introduction, "Building a Community with a Shared Future in Cyberspace" has been a permanent theme of the World Internet Conference. This year, the theme was specifically titled "Digital Empowerment Creates a Better Tomorrow: Building a Community with a Shared Future in Cyberspace." There are three considerations for this theme: 

First, we want the event to fully represent general global concerns as to what the future of the internet holds, reflect the power of the internet and other information technologies in preventing and controlling the COVID-19 epidemic and the restoration of social life, and display our resolute confidence in using digital technologies to respond to the challenges of the epidemic and in creating a better future. 

Second, we want the event to embody the spirit of openness and cooperation. We want to convey the message that China will work with the world to promote digital cooperation and make global cyberspace a more inclusive and balanced place and a place beneficial to all. 

Third, we want the event to embody China's wisdom and contributions in the promotion of internet development and governance and fully display China's sense of responsibility in promoting the building of a community with a shared future in cyberspace. 

Red Star News:

My questions are, how have you selected which world-leading internet, science, and technology achievements to highlight at this year's conference? And how is the global internet competition "Straight to Wuzhen" going? Thank you. 

Zhu Guoxian:

As an important part of the World Internet Conference, the global internet competition "Straight to Wuzhen" is a year-long international event that focuses on the digital economy. The 2020 event, based on its inaugural edition last year, has continued to solicit ideas from around the world, looking to projects representing new technologies, new models, and new business forms in the field of digital economy. By attracting the participation of many unicorn companies, to-be-listed companies, "black technology" companies, and capital both online and offline, the competition has become an important platform for matching digital economic resources and has further stimulated the innovation vitality of the World Internet Conference. 

Comprising an online preliminary round, an intermediary round, a semi-final, and a final, the event received participation applications from over 1,000 projects across 15 countries and regions this year. Over 800 of the projects then qualified for the preliminary online round. After the round, nearly 100 projects were selected for the intermediary round, which consisted of five intermediary competitions in China focused on the development of the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Belt and Road Initiative, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Yangtze Economic Belt, as well as three overseas intermediary competitions held online in North America, Europe, and Asia-Pacific. In addition, there was a special competition category for digital technologies used for preventing and controlling COVID-19. Altogether, 27 projects, 18 from China and nine from overseas, made it into the semi-final, where they were further ranked by a panel of industry and investment experts who presented their marks through on-the-spot project reviews, as well a panel of advisors who voted online. Ten of the 27 projects made it into the final. 

The 10 projects cover a wide range of fields, including integrated circuitry, life sciences, information security, and flexible manufacturing and smart fishing, and epitomize innovation and entrepreneurship trends in the digital transformation of industries and the industrial transformation of digital technologies both in China and the world. The projects depict a new path for the future development of the digital economy. The type of technology involved can be divided into three main types: key and core technologies, digital technologies that empower traditional industries, and frontier technological innovations. 

The final will be held during the World Internet Conference · Internet Development Forum. I hope that friends from the media will continue to pay attention to the competition and bear witness to new driving forces of internet entrepreneurship and innovation. Thank you. 

Zhao Zeliang: 

I would like to add something about this year's release of the world-leading Internet scientific and technological achievements. The release is always an important part of the annual World Internet Conference (WIC). Despite the impact of COVID-19 this year, the quantity and quality of the filed achievements have increased and improved. By now, we have collected more than 300 achievements around the world. This year's activity features the following characteristics. 

First, it laid great emphasis on application. Focusing on the five application fields of industrial recovery and coordinated development, digital social governance, global public crisis response, artificial intelligence and cloud life, and green digital public welfare practice, the activity explored global Internet innovative products and key technologies regarded as capable of promoting development and benefiting humanity. 

Second, it laid emphasis on representativeness. Among this year's collection, there were achievements from centrally-administered State-owned enterprises (SOEs)  such as CETC, China Telecom, China Unicom, China Mobile and China Electronics Technology Group Corporation, from famous Chinese IT and Internet enterprises such as Huawei, Alibaba Group and Tencent, and also from renowned international enterprises including Microsoft and Kaspersky. 

Third, it laid emphasis on technology and innovation value. This year's collection covered various categories including quantum computing, satellite-based Internet, artificial intelligence, high-end chips, 5G network architecture and applications, as well as various application scenarios such as smart city, intelligent transportation, telemedicine and online education. 

In accordance with the principles of "fairness, impartiality, objectivity and authority", the Recommendation Committee for World Internet Leading Scientific and Technological Achievements was established. Wan Gang, vice chairman of the National Committee of the CPPCC, chairman of the Central Committee of the China Zhi Gong Party and president of the China Association for Science and Technology (CAST), acts as honorary president. Leading Internet experts from China and Germany act as respective directors, so as to guarantee the authority and impartiality during the process of recommendation and evaluation. As for the final result, I'm looking forward to it as much as you are. Let's meet in Wuzhen. Thank you. 

Economic Daily: 

We have noticed that, in recent years, the Zhejiang sub-forum of the WIC has always been themed on innovation and breakthroughs of the industrial Internet. Zhejiang is a manufacturing powerhouse and a major province in regard to digital economy. Could you please give us a brief introduction about the development of the industrial Internet in the province? Thank you. 

Zhu Guoxian: 

Thank you for paying attention to Zhejiang's industrial Internet. At the 4th WIC in 2017, Zhejiang provincial government and the MIIT signed a cooperation agreement to jointly promote development of the industrial Internet, and jointly establish its supporting network, platform and security systems. After more than three years of effort, development in the province has moved into the fast lane. According to a report on China's digital development released by the Cyberspace Administration of China last year, Zhejiang ranked first in the industrial digitalization development index. 

As I mentioned previously, Zhejiang's GDP in the first three quarters increased by 2.3% year-on-year, and the development of the industrial Internet contributed a great deal. Zhejiang is making efforts to build a "1+N" platform system of the industrial Internet. "1" refers to the supET platform selected in the list of the country's top 10 cross-industry and interdisciplinary platforms, and honored as a world leading Internet scientific and technological achievement. "N" means to establish a batch of multi-level and systematic N-level platforms with high quality covering 10 iconic industrial chains, and 17 key traditional manufacturing industries and major industrial clusters. By doing so, we will preliminarily achieve the development target of "building one key platform for one industry, and one key platform for one field."

By the end of this year, the "1+N" platform system in the province is expected to connect with 50 million pieces of industrial equipment, serve more than 100,000 industrial enterprises, and develop more than 30,000 integrated industrial APP applications. Since Zhejiang features well-developed industrial clusters and has many SMEs, we explored and formed a business model enabling the platforms to help service providers, and the service providers to serve SMEs. The model has multiplied the service ability of industrial Internet platform, and promoted the digitalization transformation of SMEs on a large scale. In the first half year, thanks to the industrial Internet platform, we have supported a large number of enterprises to quickly resume production and work, matching supply and demand, providing material support, accelerating social production and operation to return to normal, and strongly supporting economic and social development as well as epidemic prevention and control. 

Next, fully utilizing the dividends of the WIC and giving full play to Hangzhou's innovative technological application and Ningbo's advanced manufacturing, Zhejiang will form a development architecture of industrial Internet with Hangzhou and Ningbo as the dual-core and other cities developing in a coordinated way. We will widen and deepen the integrated application of the industrial Internet, and strive to build a national demonstration province in this regard. Thank you. 

Radio Television Hong Kong:

Just now, Mr. Zhao said that the cyber power was an important idea of this conference. As we know, the communique released after the fifth plenary session of the 19th CPC Central Committee mentioned that, according to the proposals for the 14th Five-year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, China would build its cyberspace strength and promote the development of real economy in the future. Mr. Zhao, could you explain some future schemes or specific plans in this regard? Thank you. 

Zhao Zeliang:

Thank you for your question. You asked what plans we had to build China's cyberspace strength. Well, this is a question that we have been thinking about and should answer. General Secretary Xi Jinping put forward the important thoughts on building China's strength in cyberspace and the fifth plenary session of the 19th CPC Central Committee proposed important objectives and tasks of constructing a cyber power. Learning and putting into practice General Secretary Xi Jinping's important thoughts as well as implementing the guiding principles of the fifth plenary session in this regard is a critical task of China's current cyber and information work.

Our perception is that in order to study and achieve deep understanding of General Secretary Xi Jinping's important thoughts on building China's strength in cyberspace and implement the relevant tasks proposed by the fifth plenary session, we must first achieve top-level design and planning. This includes a top-level design of China's cybersecurity and IT application work, international cooperation in cyberspace, and vigorous strengthening of cybersecurity systems. We should also give full play to the potential of the internet and other information technologies to benefit mankind and meanwhile minimize their negative effects on and possible harm to society and people. Take the internet application for example – I see that so many of you journalists are holding mobile phones. How can we protect personal information and privacy, and ensure the safety of key infrastructure? These are the issues our cybersecurity work needs to answer and settle. We should forcefully promote IT applications with regard to the internet. Just now I said that satellite internet, quantum computing, high-end chips, and artificial intelligence (AI) were involved in this year's release of leading internet scientific and technological achievements. We need to apply these technologies into all aspects of social life and economic development and further give play to the role of information technology. We need to advance international cooperation in cyberspace as well, which constitutes an important task of Internet development forum in Wuzhen this year. In short, at present and in the future, it is a significant historical mission for personnel working in the cyberspace and information sector to fully implement General Secretary Xi Jinping's important thoughts on building China's strength in cyberspace and to work to accomplish the targets and tasks of the fifth plenary session. Thank you again for your question. 

China Daily:

We noticed that the CPC Zhejiang Provincial Committee held a symposium on the 15th anniversary of the implementation of the Zhejiang cultural research project some time ago and proposed a full implementation of the Cultural Zhejiang for a New Era. My question is—how will Zhejiang province use the platform of the World Internet Conference to better display and promote Zhejiang's culture? Thank you. 

Zhu Guoxian:

Thank you for your attention to Zhejiang's cultural development. We place high hopes for Zhejiang to make good use of the World Internet Conference to further promote its culture. At the symposium on the 15th anniversary of the implementation of the Zhejiang cultural research project held on September 21 of this year, Yuan Jiajun, secretary of the CPC Zhejiang Provincial Committee, proposed that we should strive to succeed in eight aspects: upholding the innovative theories of the Party, embracing core socialist values, cultivating people's characters and temperament through culture, stressing honesty and good faith, producing high-quality cultural works, combining cultural development through big data and AI, integrating cultural industry with other relevant industries, and advancing cultural reform. Through these, we can bring forward the project of the Cultural Zhejiang for a New Era, faithfully implement the "Double Eight Strategy" (referring to the eight strengths Zhejiang possesses in terms of system and mechanism; geological position; industry; coordinated development of urban and rural areas; ecology; mountain and ocean resources; environment; and culture, as well as eight measures the province is taking to take further advantage of these strengths), and build Zhejiang into an important window to fully demonstrate the cultural development in a new era.

The World Internet Conference serves not only as an important platform for the display and exchange of internet-related technological achievements but also as a stage for communication and mutual learning between various cultures. I have some examples for you. First, the town of Wuzhen itself is a shining example of Zhejiang culture. In Wuzhen, where the thousands-year-old Beijing-Hangzhou Grand Canal passes, there are well-preserved cultures unique to the ancient towns south of the Yangtze River and legacies left by renowned historical and cultural figures such as Mao Dun and Mu Xin. Wuzhen is imbued with culture, and Zhejiang's rich and profound culture is well reflected in this town.

Second, the site of the World Internet Conference is where Zhejiang's history and modernity enrich each other. The landmarks of the conference, including the Internet International Conference and Exhibition Center, the Yunzhou Guest Service Center, and the Light of the Internet Expo Center, embody the unique cultural elements of Zhejiang, echoing and integrating the traditional architectural styles of water town in Wuzhen. Volunteer uniforms are designed based on Wuzhen's water, bridges, walls, tiles, and other distinct features, brimming with a rich cultural flavor unique to Zhejiang. In addition, the annual Wuzhen Theatre Festival offers the World Internet Conference more Zhejiang cultural touches. The World Internet Conference constitutes an important window into Zhejiang's cultural innovation and development. For example, every year's Light of Internet Expo sees the release of leading internet, scientific, and technological achievements from Zhejiang enterprises, promoting the idea of "Intelligent manufacturing in Zhejiang." At all World Internet Conferences, we have carefully planned intelligent experience projects such as remote driving of unmanned vehicles, smart vendors, and 5G patrol robots, etc., so that advanced technologies can be first tested in Wuzhen, and a technological and digital Zhejiang can be shown in its clearest and most vivid fashion via the World Internet Conference platform. Meanwhile, the conference has also enabled Zhejiang culture to ride on the wings of the internet to achieve better development and prosperity. Thank you. 

China Review News:

Which global enterprises and organizations will be invited to attend this year's WIC? How will they be taking part in the conference? Thank you. 

Zhao Zeliang:

This year's Internet Development Forum continues to maintain a high-end positioning, inviting important guests from government departments, international organizations and leading enterprises within the internet field, as well as top academics, to take part in the forum in various ways. Among them, Turing Prize winners, Nobel Prize winners and Internet Hall of Fame inductees have all been invited. The number of guests attending this year's meeting in-person may be limited due to the pandemic situation. We will give full play to the communication advantages of the internet and allow more people participate online. For example, the Release Ceremony for World Leading Internet Scientific and Technology Achievements, the Youth and Digital Future Forum, the Innovation and Breakthrough in Industrial Internet Forum and other events are all being broadcast live online. People can watch these activities online through various platforms. We will also publish the speeches and opinions of guests through videos and pictures on the WIC's official website and other relevant platforms. This will facilitate continued participation and allow people to watch after the conference has ended. Thank you. 

www.CQCB.com:

Tongxiang has become the permanent host city of the WIC. What role has the internet played in Tongxiang's handling of the pandemic? Thank you. 

Sheng Yongjun:

Thank you very much for your question. The internet has played an irreplaceable role in Tongxiang's handling of the pandemic this year. Great achievements have been made following the motto "Both hands must be hard and both battles must be won," referring to the prevention and control of the pandemic situation and the resumption of work and production. These achievements have benefited from the results of the conference, which helps Tongxiang greatly improve its construction of a smart city. These achievements have benefited from the implementation of the concept of "integrated intelligent governance" and "practicing values of loyalty and honesty and being dared to break through difficulties." These achievements have also benefited from the cultivation of internet thinking models among the majority of cadres and the public after the permanent settlement of the conference in Tongxiang. I have been most impressed by three aspects: 

First, the internet has allowed for more accurate prevention and control of the epidemic. The use of precise intelligent controls has allowed for favorable, orderly and effective conditions. Before the popularization of the "Health Code," we developed and promoted the "Tongxingtong" app. Compared with the "Health Code," the "Tongxingtong" app has more functions, allowing users not only to gain admittance by code, but also to enjoy the convenience of "one code for all," marking its iterative upgrading from intelligent controls to governance and service, and its continuous extension to social management, life services and big data application fields. More importantly, it has a unified online command platform, which can achieve linkages with a single code, visualization with one picture, coverage on one network and unified management. With the help of the internet, the whole of society has been able to travel smoothly, carry out operations in an orderly manner and receive general satisfaction. 

Second, the internet has allowed a more efficient resumption of work and production. In order to restart work and production faster and more effectively, we used the internet to solve three difficulties. First, we solved the difficulty of attracting investment. Through online negotiation and cloud contract signing, we managed to continue introducing talents and attracting investment. In February, when the situation was at its most severe, we signed 27 projects with total investment of 16.2 billion yuan. Foreign investment in the first three quarters of this year has managed to grow in contrary to trends. Contracted foreign investment increased by 56 percent year on year, actual foreign investment increased by 20 percent year on year, and domestic investment from outside the city achieved 124 percent of the tasks for the whole year. In addition, 12,000 college graduates have been recruited, representing a year-on-year increase of 55 percent. Second, we solved the difficulty of production and marketing. Under the framework of "unblocking domestic circulation and promoting domestic and international dual circulation," we realized the effective connection of market chains and industrial chains. Taking online retail as an example, we alleviated the impact of the epidemic on the real market by opening up online markets. From the first to the third quarters of this year, we achieved a total of 29 billion yuan in online retail sales, a year-on-year increase of 20 percent. Third, we solved the difficulty of returning to work. In order to solve the labor shortages caused by the epidemic, we vigorously promoted "machine substitution " and industrial internet applications. So far, nearly 10,000 industrial robots have played important roles in the city. The production efficiency of enterprises has been improved, and labor shortages have been effectively eased. The integration index of industrialization and informatization is also constantly improving, and Tongxiang is more worthy of its title as a "national demonstration city for the integration of the two modernizations." In the field of agriculture, we have vigorously promoted "field nannies" with intelligent management and protection as their main features, enabling data-led agriculture . A bumper harvest is now in sight. 

Third, the internet makes people's lives more convenient. We have very deep feelings in this regard. We pushed forward the reform of a "one-stop service model" and managed to allow all items in the "whole lifecycle" of individuals and enterprises to be dealt with online. Through online classes, 110,000 teachers and students across the city continued their studies at home during the epidemic. With the establishment of the "internet plus medical service" system and the wider application of remote surgery and online diagnosis and treatment, people can now enjoy high-quality medical services at home. In addition to smart government, smart education and smart medical services, we have made great progress in smart city governance, smart traffic, smart elderly care and future communities, thus making the city more intelligent and more people-centered. 

In summary, the epidemic has clearly shown us just how closely connected the internet is with people's work and lives. Party committees and the governments should follow the trends of the times, act to seize the opportunity amid the crisis and blaze a new path through the turbulent situation. The World Internet Conference (WIC) is a platform to link China and the rest of the world - an interconnected world shared and governed by all. As Tongxiang is the permanent host city of the WIC, we will live up to the great trust placed in us and firmly follow the overarching concept of smart governance guided by the pioneering spirit of the red boat, putting loyalty and a pioneering spirit first, and achieving good results through good methods. We will ensure that richer internet application scenarios are promoted, and will help digital industries, which have the greatest innovative momentum, to prosper. We will ensure the future of the internet in Tongxiang and Wuzhen. Thank you. 

Shou Xiaoli:

And now for the final question. 

Guangming Daily:

The blue books issued each year during the WIC are an important outcome and are widely followed. What topics do this year's blue books cover and what innovations are there compared with previous years? Thank you. 

Zhao Zeliang:

Thank you for your question. As you just mentioned, every year we release two blue books during the WIC: the World Internet Development Report and the China Internet Development Report. This year's internet development forum also plans to release the "World Internet Development Report 2020" and the "China Internet Development Report 2020." The "World Internet Development Report 2020" will mainly introduce the general trends within global internet development and the situation regarding internet development in major countries, and will focus on showcasing the latest technologies, applications and developments in the global internet, and the outlook of its developing trends. 

In the "China Internet Development Report 2020," we thoroughly put into practice General Secretary Xi Jinping's thoughts on building China's strength in cyberspace. We have comprehensively assessed the development of the internet in provinces and cities nationwide. We have focused on the achievements and the latest progress of China's internet development, especially the essential role and great contribution of China's internet during the COVID-19 epidemic, to present how China's cyber and information sector has improved the quality and efficiency of its regional and national economies. We will profoundly interpret China's thoughts, visions and positions in its commitment to build a peaceful, secure, open, cooperative and orderly cyberspace. 

Shou Xiaoli:

Thank you to all our speakers and friends from the media. That concludes today's press conference. Thank you. 

Translated and edited by Lin Liyao, Zhang Junmian, Xiang Bin, Zhou Jing, Liu Jianing, Li Huiru, Yuan Fang, Wang Qian, Wang Wei, Wang Yiming, Yang Xi, Zhang Jiaqi, Xu Xiaoxuan, Wang Yanfang, Laura Zheng, David Ball, and Geoffrey Murry. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Yu Xuejun, member of the Leading Party Members' Group and vice minister of the National Health Commission (NHC)

Mao Qun'an, director of the Department of Planning and Information of the NHC

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Oct. 28, 2020

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to the press conference of the State Council Information Office (SCIO). During the 13th Five-Year Plan period (2016-2020), remarkable progress has been achieved in the reform and development of China's health sector. Today, we are pleased to be joined by Mr. Yu Xuejun, member of the Leading Party Members' Group and vice minister of the National Health Commission (NHC), and Mr. Mao Qun'an, director of the Department of Planning and Information of the NHC. They will brief you on the reform and development of China's health sector during the 13th Five-Year Plan period and answer your questions. First of all, I would like to invite Mr. Yu to make his opening statement.

Yu Xuejun:

Thank you, Ms. Shou. Friends from the media, good afternoon.

The 13th Five-Year Plan period has played a decisive role in achieving the first centenary goal of building a moderately prosperous society in all respects, and has been crucial for the development of public health sector in China. Committed to the philosophy of people-centered development, the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core made the decision to carry out the Healthy China initiative and set out the principles for the CPC's public health work in the new era. During this period, the CPC Central Committee and the State Council convened the National Health and Fitness Conference and issued the "Healthy China 2030 Planning Outline; the National People's Congress adopted the Law on Basic Healthcare and Health Promotion and the Law on Traditional Chinese Medicine (TCM). These efforts have ushered in a new stage for implementing the Healthy China initiative and promoting health for all. 

Under the strong leadership of the CPC Central Committee and the State Council, the NHC has made every effort to implement the Healthy China initiative and shift the focus on health care from treating illnesses to improving people's health. From 2015 until the end of 2019, the average life expectancy in China rose from 76.3 years to 77.3 years, an increase of one year within this four-year period. The maternal death rate, infant mortality rate and under-five mortality rate declined from 20.1 per 100,000, 8.1‰ and 10.7‰ to 17.8 per 100,000, 5.6‰ and 7.8‰, respectively. The main health indicators for Chinese people are generally better than the average level in middle- and high-income countries. The proportion of personal spending in China's total expenditure on health fell to 28.4%. The implementation of the Healthy China initiative has got off to a good start.

First, the Healthy China initiative was launched and implemented with joint efforts for shared benefits. The State Council issued guidelines for the initiative's implementation and established a promotion committee. A total of 15 special campaigns were launched to deal with factors influencing health, to protect full-life-cycle health, and to prevent and control major diseases. People generally now have greater health awareness and take more action to improve their fitness. The patriotic sanitation campaign was further deepened and the China Healthy Cities and Towns Initiative was launched nationwide. The idea of personal responsibility in health matters was reinforced. Health awareness in both urban and rural areas rose to 19.17% in 2019 from 10.25% in 2015, and this figure is expected to have doubled during the 13th Five-Year Plan period by the end of this year.

Second, the medicine and health care system was enhanced while overcoming difficulties, and a general framework for systems with Chinese characteristics for providing basic health care was established. Coordinated medical services, medical insurance and pharmaceutical reforms continued. We moved forward across the board with the comprehensive reform of public hospitals and ended drug price markups in public hospitals. We launched trials for modern hospital management and promoted a performance assessment system which emphasizes quality and public benefits. We improved incentive mechanisms in terms of salaries and professional titles for medical staff working at the community level. We advanced the development of health care consortiums and the comprehensive reform of county-level public hospitals to make quality medical resources more accessible within communities. Rates of participation in the basic medical insurance systems stood at above 95%. The number of essential medicines increased from 520 to 685. We pressed ahead with centralized procurement and usage of medicines, and the prices of selected medicines in a pilot program dropped by more than 52% on average. This has helped solve the "last mile problem in making medicines at lower prices more available for clinical practice in hospitals. We improved the comprehensive regulatory system of the health sector and promoted the development of private hospitals and health-related industries in a well-regulated manner. All these efforts are aimed at meeting people's diverse health needs.

Third, continuous improvements were made in the health care service system, and services have become more accessible. We optimized the distribution of medical resources by starting the construction of national and regional medical centers and improving county-level health care service systems. A total of 84% of county-level hospitals qualified for designation as hospitals at or above the level of grade two. From 2015 to 2019, the number of general practitioners increased from 1.38 to 2.61 per 10,000 people; the number of beds in medical and healthcare institutions increased from 5.11 to 6.3 per 1,000 people; and the number of occupational physicians and physician assistants rose from 2.22 to 2.77 per 1,000 people. The number of registered nurses reached 3.18 per 1,000 people in 2019, compared with 2.37 per 1,000 people in 2015. Nearly 90% of households are now less than 15 minutes from a medical institution.

Fourth, we have made efforts to ensure that rural poor people have access to basic medical services. The health and medical assistance program for poverty alleviation has achieved notably effective results. We focused our efforts on three aspects, namely, health service capacity building in county hospitals; integrated management of health personnel in medical institutions at a county and township level, as well as at a township and village level; and the standardization of township health centers and village clinics. We also ensured that qualified county-level hospitals in poverty-stricken counties have been incorporated into the National Health Security Project and organized medical teams from Grade III (top-level) hospitals to assist county-level hospitals in poverty-stricken counties. A telemedicine service system has been put in place to cover all the national-level impoverished counties and remote areas. The list of diseases covered by a special aid and treatment program for rural poverty-stricken populations suffering from serious illnesses has been expanded to 30 types. The country has provided categorized treatment to over 19 million poverty-stricken people. Nearly 10 million families across China who fell into the clutches of poverty due to illness have shaken off their state of destitution.

Fifth, the level of equal access to basic public health services has been further enhanced, advancing the overall strength of public health in China to a new stage. Annual per-person government subsidies for basic public health services were raised from 40 yuan in 2015 to 74 yuan this year. The national basic public health service program has provided 14 categories of services for free to all urban and rural residents. We also improved major infectious disease control measures, implemented a three-year action plan for the critical battles against occupational and endemic diseases, further expanded the scope of the national immunization program, and ensured the program for early diagnosis and early treatment of cancer to cover more people. In 2019, the rate of premature deaths from major chronic diseases was reduced by 10.8% compared with that in 2015.

Sixth, the management of maternity and child care and family planning services has been further enhanced. The method of healthy aging has been actively promoted. We made changes to our birth policy in an orderly way to improve it. In 2019, 59.5% of China's newborn babies were not the first child in their respective family. Meanwhile, we improved relevant coordinated policies to advance care services for infants under three-years-old. We also comprehensively strengthened and integrated the prevention and treatment of birth defects and piloted screening, diagnosis and rehabilitation for five categories of disabilities among children. Moreover, we enhanced old-age health education, prevention and healthcare services and promoted combined medical and care services for the elderly. More than 40,000 institutions have provided medical assistance to senior citizens who opt to stay at home. All Chinese over 65 years old have been provided free annual physical examinations.

Seventh, we have improved policies and mechanisms that will further unleash vitality. New advances have been made in the preservation and innovation of traditional Chinese medicine (TCM). The CPC Central Committee and the State Council issued guidelines to promote the preservation and innovative development of TCM. The State Council held a national TCM conference. As a result, improvements have been achieved in all respects including the service system building of TCM, training of TCM professionals, technological innovation, and the quality of TCM. There are currently more than 65,000 TCM institutions across the country, providing diagnosis and treatment to about 1.16 billion people annually. TCM and Western medicine have different strengths, while complementing each other with advantages. They work together to protect people from diseases and improve public health.

The ongoing fifth plenary session of the 19th Communist Party of China Central Committee is mapping out a national development blueprint for the 14th Five-Year Plan period, as well as for a longer-term vision for 2035. The meeting will also make up a systematic plan to comprehensively deepen the implementation of the Healthy China initiative. We will earnestly apply the guiding principles of the fifth plenary session of the 19th CPC Central Committee, implement our tasks in a targeted way, and strive to provide comprehensive lifecycle health services to our people to ensure better health for them.

That's all for my introduction. Now, my colleagues and I are ready to take your questions. 

Shou Xiaoli:

Now, the floor is open for questions. Please identify your news outlet before you raise the question. Let's begin.

CNR:

During the period of COVID-19 epidemic prevention and control, people have keenly realized that public health events are closely related to people's health and safety. What measures have been taken to improve the public health system in the 13th Five-Year Plan period? And what progress has been made? Thank you.

Yu Xuejun:

Thank you. This is a very important question.

The public health situation in the 13th Five-Year Plan period is very complex due to the threat of multiple diseases and the existence of multiple health-affecting factors. During this period, the CPC Central Committee and the State Council have made it a major goal to modernize China's governance system and capacity to build a stronger public health service system that can promptly and properly handle the sudden outbreak of a major infectious disease or the emergence of a new major infectious disease. It is stressed that emphasis should be put on prevention, prevention and control should be strengthened at the earliest stage possible, and prevention should be combined with treatment so as to provide safe, convenient, and inexpensive public health and basic medical services for the public. In implementing the decisions and plans of the central authorities, the National Health Commission (NHC) has deepened understanding of the public health governance concept, improved strategies for the prevention and control of major diseases, and taken concrete measures to strengthen the public health system. In 2016, the NHC, together with the National Development and Reform Commission (NDRC) and the National Administration of Traditional Chinese Medicine (NATCM), released the "National Health Protection Project Development Plan", in which the building of public health service capacity was listed as a key area of support during the 13th Five-Year Plan period. From 2016 to 2020, the government arranged 141.5 billion yuan, up 23 percent since the 12th Five-Year Plan period, from the central budget to invest in more than 8,000 public health projects such as the construction of disease control and prevention centers. A public health service system has been established that has professional public health institutions, including institutions for disease prevention and control, emergency treatment, and health supervision, as its backbone. The system works with the support of various types of medical institutions at all levels, makes good use of community medical institutions, and covers and involves the participation of everyone.

This year, NHC, NDRC and NATCM issued the Public Health Prevention, Control and Treatment Capacity-Building Plan to further modernize the disease control system, upgrading the treatment capacity of county-level hospitals and improving the urban infectious disease treatment network. We are now advancing the construction of national major epidemic treatment bases and pilot projects to transform public facilities for both peacetime and wartime purposes in an orderly manner. All this has laid a solid foundation for improving basic public health services and effectively responding to public health emergencies. 

During the 13th Five-Year Plan period, China successfully responded to outbreaks of H1N1, H7N9, and the Ebola hemorrhagic fever, and the incidence of major infectious diseases dropped significantly. The response to the once-in-a-century COVID-19 epidemic is an overall test of the effectiveness of our national public health system. General Secretary Xi Jinping pointed out that the fight against COVID-19 shows that China's public health service system, medical service system, medical security system, drug supply system, and major epidemic prevention and control and emergency management system are generally effective, but that there are also weaknesses.

During the 14th Five-Year Plan period, we will strive for more precise and effective prevention while addressing deficiencies, loopholes and weaknesses together with relevant departments in line with the direction and requirements the central authorities have set for the reform of the public health system. We will make greater efforts to improve institutions, clarify functions, strengthen monitoring and early warning, and improve the competence of relevant personnel. With this we endeavor to build a strong public health system that can effectively safeguard the people's health. Thank you.

Thecover.cn:

In recent years, the facilities and working environment of community medical institutions have greatly improved, but the lack of professionals is still a severe handicap for them. What measures have been taken during the 13th Five-Year Plan period to improve the situation? How effective have the measures been? Thank you.

Yu Xuejun: 

Thank you for your question. Qualified medical professionals are the foundation for building a healthy China and an important guarantee for better community services. During the 13th Five-Year Plan period, the NHC took a variety of robust measures to improve the number and competence of medical professionals working at the community level. I would like to inform you of the work done in several areas.

First, we have trained medical professionals for community medical institutions through our medical education system, which is comprised of college education, post-graduation education and continuing education. We have established a unified national system to standardize the training of resident doctors. The purpose is to cultivate qualified clinicians under the same standards, and the system has helped train a large number of medical college graduates who have gone to work at township health centers in central and western China as agreed before. We have also taken a series of measures to guide the flow of medical professionals, including ones to pair up urban and rural medical institutions for the former to support the latter, to encourage college graduates to work at community medical institutions, to require urban doctors to work at community institutions before getting a promotion, and to send 10,000 doctors to support rural health projects. In recent years, the proportion of medical professionals holding intermediate and senior professional titles at community institutions has continued to increase, and the structure has been further optimized.

Second, we have encouraged registered doctors to work for multiple medical institutions so that medical professionals can provide health care services at the community level. During the 13th Five-Year Plan period, we established a regional registration system for doctors. We revised and issued the Administrative Measures for the Registration of Practicing Medical Doctors, which changes "place of practice to "provincial and county-level administrative division of the location of the medical, prevention or health care institution where a medical practitioner practices. After registering, doctors can work for multiple medical institutions within the registered provincial and county-level administrative regions. They only need to register at their main working institution and then file the records if they practice medicine in other places. At present, there are 260,000 doctors practicing in multiple institutions across the country, effectively alleviating the shortage of medical personnel in community-level medical institutions and private hospitals.

Third, we have increased training for doctors to bring professionals to community-level institutions. We have issued guidance to promote the coordinated reform of the national doctor training and incentive mechanism, and conducted research and formulated outlines for the training of general practitioners in job transfers. Beneficial policies were introduced to support doctors to participate in the general practitioner job transfer training program. Trainees from poverty-stricken areas, ethnic minority areas, and old revolutionary base areas will be given priority in hiring under the same conditions. During the training period, the pay package for trainees is guaranteed. After passing the training examination, their scope of practice as a general practitioner will be expanded. At present, 180,000 people have taken part in the general practitioner job transfer training. The number of general practitioners per 10,000 people has increased from 1.38 in 2015 to 2.61 this year.

Fourth, we have improved the competence of community-level professionals through special training. Since 2018, we have implemented competence improvement training projects for physicians, nurses, management staff, and village doctors working in township hospitals and community health service centers to help them hone their skills. As of 2020, the central government has invested a total of 1.02 billion yuan into the training of more than 500,000 health workers at the community level.

At present, the total amount of high-quality medical resources in China is insufficient, and the distribution of medical resources between urban and rural areas is still uneven. In particular, we still face a shortage of professionals. In the future, we must continue to boost the talent pool and enable medical professionals to better provide health care services for people. Thank you.

People's Daily:

This year marks the final year for China to achieve its goal of eradicating poverty. Raising standards of health is an important way of lifting people out of poverty. What specific measures has China taken in terms of alleviating poverty by improving health standards? Thank you.

Yu Xuejun:

I will answer this question. We all know that poverty alleviation is one of the three critical battles. Reducing poverty by improving health standards is a key to winning the battle against poverty. The goal becomes more harder to achieve the closer we get to it. The NHC regards reducing poverty by improving health standards as an important foundation for our implementation of the healthy China initiative and the rural revitalization strategy, an important task in the reform and development of health care, and an important means to address areas of weakness. Focusing on the goal of ensuring basic medical care for the poor, we have introduced and implemented targeted policies to achieve the goal of ensuring the poor population are covered by the health care system and have access to doctors and hospitals.

First, we have emphasized improving the capacity of medical and health services in poor areas. Addressing the problem of no medical or health institutions and personnel in rural poor areas, township and administrative village is a historical achievement. We have worked to ensure that every poverty-stricken county has at least one public hospital, and every township and administrative village has at least one health center and clinic equipped with qualified doctors. Grade-III hospitals were paired-up with hospitals in poverty-stricken counties to provide assistance. Major headway has been made in promoting the capacity building of county-level hospitals, the construction of the "county and township integration, township and village integration mechanism, and the construction of rural health care institutions.

Second, we have made up for the shortcomings of public health services. We have promoted the comprehensive prevention and control of infectious diseases and endemic diseases. Efforts to promote the comprehensive prevention and control of major infectious diseases and endemic diseases such as AIDS, tuberculosis and echinococcosis, have delivered historic results. The health standards of people living in impoverished areas have also significantly improved. Together with the National Development and Reform Commission (NDRC), we have successively issued technical guidelines for the construction of adaptable and convertible wards, fever clinics, and laboratories of medical and health institutions in general hospitals that can cope with an epidemic. All projects in poverty-stricken areas that meet the necessary requirements have been included in the scope of financial support from the central government.

Third, we have effectively ensured that the poor population has access to basic medical and health services. A condition-specific and category-based approach has been applied to the medical treatment of patients. Adopting this approach, we have treated more than 19 million poor patients and continued to provide health services for key groups. We have worked to ensure that all poor people in need can be relocated, covered by health care and receive treatment. For registered poor households, the proportion of out-of-pocket payments of health care expenses has been reduced to about 10%. We have established a monitoring and early warning mechanism that can timely locate people in need, give targeted treatment, follow up and effectively ensure their health, and prevent them from falling into poverty or returning to poverty due to illness. As I just mentioned, we have successfully lifted nearly 10 million impoverished households, who fell into or returned to poverty due to illness, out of poverty.

Next, the NHC will continue to summarize these successful experiences and help fight the poverty alleviation battle by improving people's standard of health. At the same time, we will establish a long-term mechanism that can address both the symptoms and root causes with long-term and short-term plans, in order to ensure that when we achieve the goal of building a moderately prosperous society in all respects, and that no group of people is left behind because of health issues. Thank you.

The Poster News APP:

During this fight against the epidemic, the Internet Plus Healthcare played an important supporting role and drew attention. What did the National Health Commission (NHC) do to support Internet Plus Healthcare? How did it work?

Yu Xuejun:

It is an important question. Information technology is changing rapidly, and cloud computing, the Internet of Things, big data, artificial intelligence and mobile internet play an increasingly important role in healthcare work. In particular, great progress has been made in information technology and Internet Plus Healthcare during the 13th Five-Year Plan period.

Now, I would like to invite my colleague Mr. Mao to brief you on it.

Mao Qun'an:

As just introduced by Mr. Yu, Internet Plus Healthcare is becoming increasingly important in optimizing the allocation of health resources, innovating service models, improving service efficiency, reducing service costs and enhancing people's sense of gain in getting access to health services. It also adds new vitality to the development and reform of China's healthcare undertakings. The NHC and relevant government departments jointly implemented the opinions on promoting Internet Plus Healthcare issued by the General Office of the State Council in April 2018.

First, we formulated and released over 10 policies, covering the regulation and management of online healthcare, pricing and payment, personal information protection and so on. This was done in coordination with over 10 other government departments including the National Healthcare Security Administration. 

Second, we mounted up support for information infrastructure. Playing a pivotal role, regional platforms break the situation of information isolated island, and released 227 standards of applying information technology in healthcare. Now, over 90% of the top-level public hospitals have already realized inter-hospital information exchange and sharing.

Third, we summarized experience in promotion and demonstration. The NHC signed agreements with 11 localities including Ningxia on jointly building Internet Plus Healthcare demonstration provinces, autonomous regions and municipalities. They will be used to explore development policies, regulatory models, as well as standards and norms.

Fourth, we strictly observed the bottom line of supervising safety. So far, 30 provinces throughout the country have already set up online platforms of supervising healthcare services. The move aims to use new means to regulate new forms of business, protect important data and personal information with special actions, strengthen privacy protection, and ensure medical quality and data security.

Through the joint efforts of many parties, the development of Internet Plus Healthcare benefited increasingly. Now in China, there are 900 internet-based hospitals, a telemedicine collaboration network covering more than 24,000 medical establishments in all prefecture-level cities, and over 5,500 hospitals at or above the level of grade two that can provide online services. Zhejiang province incorporated an electronic health card and electronic social security card, reducing the number of procedures when seeing a doctor from eight to three, and cutting the times of queuing up for payment.

Various localities offered people a series of services during the epidemic prevention and control process, including epidemic prevention knowledge sharing, online question and answers, psychological counseling, remote consultation, further consultation for patients with chronic diseases, and drug delivery. The services based on Internet Plus Healthcare helped to reduce potential risks of cross infection in gathering, and met people's needs for medical care, opening up a second front of fighting against the epidemic on the internet.

As a next step, the NHC will further integrate information technology and healthcare, and improve the development basis, mechanism and application by making better use of Internet Plus, so as to benefit more people with Internet Plus Healthcare, and make people more satisfied with healthcare services. Thank you.

China Daily:

The rule of law is the foundation of governance, and a major part of improving the governance system and its capacity. What progress and achievements has China made in the rule of law in the healthcare field during the 13th Five-Year Plan period? Thank you.

Yu Xuejun:

Thank you for your question. It is also very important.

The NHC has attached great importance to governance and administration in accordance with the law, thoroughly studied and implemented the new ideas, new thinking and new strategies of General Secretary Xi Jinping on overall law-based governance. We focused on core tasks of healthcare work, exercised administration in accordance with the law in an all-round manner, strictly perform duties in accordance with the law, and strengthened power supervision and institutional construction, making breakthroughs in the rule of law in the healthcare field during the 13th Five-Year Plan period.

First, we ensured good governance with sound laws, and consequently, promoted the high-quality development of healthcare undertakings. Major breakthroughs were made in healthcare legislation. The Law on Basic Medical Care and Health Promotion, an important law attracting wide attention, was finally introduced during the 13th Five-Year Plan period after a long legislation process. In addition, the Law on Traditional Chinese Medicine and the Law on Vaccine Administration were also introduced successively. In particular, the Law on Basic Medical Care and Health Promotion is the first fundamental and comprehensive law in the healthcare field in China. Upholding principles of putting people first and developing healthcare undertakings for public good, it strives to provide fair and accessible basic healthcare services, cultivate community-level medical organizations and personnel, and transform experiences in medical reforms such as three-tier system and medical consortium construction into laws. At the same time, it stipulates in law the fundamental purpose of healthcare undertakings, and to establish a basic healthcare system, improve healthcare service system, cultivate healthcare personnel, upgrade healthcare services, develop healthcare technologies, optimize health promotion measures, increase drug supply and funds, and strengthen supervision and administration. The law provides a legal protection to healthcare reform and development.

Second, we have strengthened and explored new ways for healthcare supervision, tightened law enforcement, promoted the oversight model using randomly selected inspectors to inspect randomly selected entities and requiring the prompt release of results. We also applied internet and IT technologies in the supervision system. We strengthened operational and post-operational oversight, and ensured that law enforcement officials of different departments can complete their tasks more efficiently through integrating similar inspection procedures. We are also trying to improve the effectiveness of law enforcement through building the social credit system, promote the mechanisms for preempting and mediating medical disputes, improve self-management of medical institutions, and establish a routine process for preventing and handling medical disputes.

Third, we have delegated powers and improved public services to increase people's sense of fulfillment. Specifically, we adjusted our administrative approval procedures and relaxed rules for market entry. For example, there are no longer restrictions on running private hospitals, the number of such hospitals in certain areas, as well as their geographical distributions. Private hospitals are able to declare a commitment to compliance in applying for allocation of class-B large medical equipment. All intermediary services which are required to obtain government approval are banned, and the reform for separating the business license from certificates required for starting a business is carried out more extensively. The requirement for review and approval for setting up clinics was replaced by a simple filing process as we continue to streamline administrative procedures and reduce the time needed for those procedures. Government services are now available without regional barriers and filings for free medical consultations and other services can also be completed online. All of these policy measures have been formulated with the aim of providing better services.

Next, under the goal of advancing the Healthy China Initiative and enhancing the rule of law, we will implement the Law on Basic Healthcare and Health Promotion, revise the Law on the Prevention and Treatment of Infectious Diseases and other major laws and regulations, so as to build a systematic, properly-formed and effective legal system for the healthcare sector. Thank you.

National Business Daily:

During the 13th Five-Year Plan period, what measures have been taken to deepen health system reform to make medical services more accessible and affordable? Thank you.

Yu Xuejun:

I'll take this question. The reform of the health care system is an issue of common concern, especially since the difficulty and high cost of access to medical care remains a major livelihood issue of concern to the public.

During the 13th Five-Year Plan period (2016-2020), the Central Committee of the Communist Party of China (CPC) and the State Council prioritized healthcare system reform on our overall reform agenda. We have made much progress in making medical services more accessible and affordable. 

Regarding accessibility, we focus on rebalancing the distribution of quality medical resources so that more are available at the community level. First, we push the orderly development of regional medical centers as we launched pilot programs in eight provinces so as to upgrade the distribution of high level medical resources across the country. We promoted the construction of health alliances and medical reform in county-level regions. As of now, 84% of county-level hospitals are above Grade II levels. In 2019, up to 90% of patients with common diseases and frequently occurring diseases have sought medical treatment at their local county-level hospitals.

Second, we keep integrating resources and services. We have set up 1,408 medical groups, 3,346 county-level medical alliances, and 3,924 cross-region alliances for disease treatment. We have also promoted the family doctor services, and built more community hospitals on a pilot basis, so as to improve community-level medical services. Third, we keep pushing reforms to delegate power, improve regulation, and upgrade services, and promote the regulated development of the health industry and privately-run hospitals. Fourth, we are also moving faster toward the applications of internet and IT technologies in the healthcare sector, and continuing to scale up tele-medicine services.

In 2019, telemedicine services were carried out nationwide for more than 21,723,000 visits. By the end of 2019, 258 cities and municipalities had implemented a regional medical consultation card. Information technology is used to optimize service processes, and online services such as medical appointments, consultation navigation, and mobile payment are commonly implemented in hospitals above the second level. Over 50% of outpatient services in third tier hospitals are delivered via the online appointment system.

In the area of alleviating the high cost of medical care, we have focused on centralizing medicine procurement in order to lower drug prices. The prices for the first batch of 25 selected drugs were cut by an average of 52% in a pilot program carried out in four municipalities and seven sub-provincial cities. The program was later scaled up across the country. The second batch of selected drugs have also seen their prices cut by an average of 53%. We carried out drug pricing negotiations, applied a zero-tariff policy on imported cancer treatment drugs, improved the national system of essential medicines, regulated drug use, and guaranteed the availability of drugs in short supply. Second, with expanded comprehensive reform in public hospitals, we put an end to the practices of hospitals funding their operations with profits from overpriced drugs, launched pilot programs for modern management in hospitals, and set up a performance evaluation scheme that focuses on quality and the public good. Third, the national medical insurance system has been improved as we established a unified basic health and unified major disease insurance schemes for rural and non-working urban residents across the country. Government subsidies for basic medical insurance is increasing year by year, the medical bill payment mechanism is moving from a fee-for-service model to a comprehensive payment mechanism, the medical treatment system is improving, and commercial health insurance is receiving increased government support.

The 14th Five-Year Plan period will be crucial as we continue to reform the healthcare system. We will strive to make medical services more accessible and affordable to the general public.

Thank you.

Hong Kong's Bauhinia Magazine:

The health planning of the 13th Five-Year Plan proposed the preservation, innovation and development of traditional Chinese medicine (TCM). And this year witnessed the important role of TCM in fighting against the COVID-19. So, what exactly has TCM achieved in terms of preservation and innovation during the 13th Five-Year Plan period? How to evaluate the contribution of TCM in the aspect of promoting China's healthcare development? Thank you.

Yu Xuejun:

I'll give the floor to Mr. Mao.

Mao Qun'an:

Regarding TCM's overall situation, Mr. Yu just introduced several major events in the TCM field during the 13th Five-Year Plan period. Guidelines have been issued on promoting TCM's preservation, innovation and development, and the State Council held a national conference on these aspects. 

It should be said that TCM reflects all the advantages and characteristics of China's healthcare undertakings. Over the years, we have striven to provide public routine medical services. Especially in personal healthcare aspects, people are more likely to accept the theories and treatments of TCM. During the prevention and control work of dealing with the COVID-19 pandemic, TCM participated in the treatments from the very start and achieved very good results. Many effective drugs and rehabilitation treatments have been developed in the actual treatment processes. This once again highlights traditional advantages of TCM and reminds us that we should continue to promote it on the basis of inheritance and preservation.

The National Health Commission and the National Administration of Traditional Chinese Medicine have reached agreements on building TCM service system, professional personnel training, technological innovation, etc. In the 13th Five-Year Plan and in compiling the 14th Five-Year Plan, the development of TCM occupies a very important place. Recently, according to the instructions of leaders of the commission, our planning department has closely communicated with the National Administration of Traditional Chinese Medicine to incorporate TCM, in the next step, into the planning and building of the National Medical Center and National Regional Medical Care Center. Therefore, TCM will enter a rapid development phase during the 14th Five-Year Plan period, and will enjoy a golden time. Thank you.

China Review News:

During the 13th Five-Year Plan period, building the Healthy China Initiative entered the fast track. How can we make use of the organizational advantages of the patriotic sanitation campaign to carry out and to help promote and implement the Healthy China Initiative? Thank you. 

Yu Xuejun:

This issue is also very important. After the outbreak of the pandemic this year, General Secretary Xi Jinping issued important instructions regarding the patriotic sanitation campaign on many occasions. Especially during the pandemic prevention and control period, the campaign has played a very important role, and its work has been thoroughly rejuvenated. It still needs to be further reformed and to be given new connotations and extensions. Mr. Mao is in charge of this work, so I'll invite him to answer the question.

Mao Qun'an:

The 19th CPC National Congress made major decisions and deployments on implementing the Healthy China Initiative. It has stressed that we need to put prevention first, advocate a healthy and civilized lifestyle, and prevent and control major diseases. The State Council released a plan on the implementation and evaluation of the Healthy China initiative, established a national level promotional committee, published the Healthy China Program (2019-2030), and issued the plans for organizing, implementing and assessing of the program. The program is the construction blueprint and roadmap for implementing the "Healthy China 2030" Planning Outline. We have set up 15 major special actions. Each of them has clear tasks, goals and specific responsibilities for individuals, families, societies and government. This fully reflects integration of health into all policies. It will help promote interactions between departments and the society, as well as the involvement of all citizens. And it will be conducive to undertaking the health responsibilities and sharing the health action outcomes. Last June, Mr. Yu launched the Healthy China Initiative here.

Since the launch, it has made good progress. The public has been paying more attention to health, and increased their awareness of health and ability of disease prevention. Local governments have carried out various health promotion activities to solve prominent health problems, such as nearsightedness and obesity among young people, public healthy diet and scientific fitness. All have achieved good results.

The patriotic sanitation campaign constitutes the successful practice of our Party in applying the mass line in regard to the work of health and disease prevention, and an important tool for building a healthy China. During the 13th Five Year Plan period, we organized and mobilized the general public to solve prominent hygiene and health problems in their work and lives, with special focus on building healthy cities and towns, improving environmental hygiene in both urban and rural areas as well as promoting the rural "Toilet Revolution, all have scored remarkable achievements.

Next, we will continue to give full play to the organizational and mobilizing advantages of the patriotic sanitation campaign, focusing on the major health problems facing our residents and the main factors affecting their health, and further carry out the basic projects for healthy communities, healthy villages and towns, healthy organizations and healthy families. Through these projects, we will establish and improve the health management and service system, and enhance healthcare, sports and fitness, environmental protection and psychological intervention in an integrated manner. We count on the whole of society to make concerted efforts under the principle of extensive consultation, joint contribution and shared benefits, so as to make sure all the related tasks are performed in all communities and organizations. 

We will also review and popularize the good habits developed through COVID-19 prevention and control efforts, such as wearing face masks in public places, implementing waste sorting, keeping social distancing requirements, portioning the meals for everyone and using serving chopsticks when eating together, making medical appointments and seeking medical consultation online, as well as other aspects of a healthy lifestyle. Meanwhile, we will further enrich the connotation of the patriotic sanitation work, innovate work patterns and approaches, promote the transformation from integrated environmental hygiene improvement to comprehensive social health management, and give play to the unique role of patriotic sanitation work in building a healthy China. Thank you.

Xinhua Finance:

Mr. Mao, what is the current development of the smart fitness and elderly care industry, please? What steps will be taken next to support and encourage the growth of the industry? Thank you.

Mao Qun'an:

Since the establishment of the National Health Commission (NHC), providing health services for the elderly as well as infants and children has been a very important task for us. Improving the healthcare service system for the elderly is a significant task at present, and is also the work we should strengthen during the 14th Five Year Plan period. "Fitness and elderly care + internet + smart management is now a new form of business, and is also a promising development model for fitness and elderly care that we have confidence in. In our daily work, we pay very close attention to the explorations made by some enterprises in this regard. We hope that, in the development of the fitness and elderly care industry, the new generation of information and communication technologies can be well applied, and the current mature technologies and approaches of healthcare can be adopted. Additionally, we will vigorously advance the smart fitness and elderly care services as a branch of the health industry in future developments. Thank you.

Shou Xiaoli:

Thank you, Mr. Yu and Mr. Mao, as well as friends from the press. That's all for today's press conference of the State Council Information Office. Goodbye!

Translated and edited by Zhang Liying, Huang Shan, Li Xiao, Zhang Rui, Yuan Fang, Fan Junmei, Zhang Jiaqi, Wang Yanfang, Guo Yiming, He Shan, Yan Xiaoqing, Zhou Jing, Xu Xiaoxuan, Li Huiru, Wang Yiming, Yang Xi, Jay Birbeck, Laura Zheng, David Ball, and Geoffrey Murry. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Liu Huanxin, vice-minister of agriculture and rural affairs

Wu Hongyao, member of the Leading Party Members' Group of the Ministry of Agriculture and Rural Affairs

Wei Baigang, chief economist of the Ministry of Agriculture and Rural Affairs

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Oct. 27, 2020

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to the State Council Information Office (SCIO) press conference. During the 13th Five-Year Plan period (2016-2020), major progress has been made in the development of agriculture and rural areas. All the related tasks and targets set out in the plan have been accomplished. Today, we are pleased to be joined by Mr. Liu Huanxin, vice-minister of agriculture and rural affairs; Mr. Wu Hongyao, member of the Leading Party Members' Group of the Ministry of Agriculture and Rural Affairs; and Mr. Wei Baigang, chief economist of the Ministry of Agriculture and Rural Affairs. They will brief you on the achievements made in the development of agriculture and rural areas during the 13th Five-Year Plan period and answer your questions.

First of all, I invite Mr. Liu to make an opening statement.

Liu Huanxin:

Ladies and gentlemen, friends from the media, good morning. I'm very delighted to meet you here. I would like to thank you for your long-term concern and support for the work related to agriculture, rural areas, and farmers.

This year is the final year for the completion of the 13th Five-Year Plan. Departments of agriculture and rural affairs at all levels have been fully implementing the guiding principles of General Secretary Xi Jinping's important instructions, putting into practice the decisions and plans of the Central Committee of the Communist Party of China (CPC) and the State Council, and focusing on ensuring stability on the six fronts and security in the six areas. We've effectively responded to risks and challenges, including the COVID-19 epidemic, severe flooding, and serious crop diseases and pests . The development of agriculture and rural areas has maintained a stable and strong momentum. Grain output is expected to reach a new record. The recovery of hog production is better than expected. There are adequate supplies of non-grain food and the gap between urban and rural incomes has narrowed.

During the 13th Five-Year Plan period, the CPC Central Committee with Comrade Xi Jinping at its core has placed addressing issues relating to agriculture, rural areas, and the wellbeing of farmers at the top of the work agenda of the CPC, given priority to agriculture and rural areas, and mapped out the important strategy for rural revitalization. Historic achievements and changes have been made in agriculture and rural areas. Related tasks and targets set in the 13th Five-Year Plan have been accomplished. All this has offered strong support for winning the battle of poverty elimination and completing the building of a moderately prosperous society in all respects as scheduled. It has also helped seize the strategic initiative in maintaining overall stability in economic and social development, as well as tackling risks and challenges at home and abroad.

First, we have greater control over the food supply for 1.4 billion Chinese people. We have continued to increase food crop production based on farmland management and the application of technology. We have completed the task of developing 53.36 million hectares of high-standard cropland that produces good yields in times of drought or excessive rain. We have established 72.53 million hectares of functional zones for grain production and protected areas for the production of major agricultural products. Grain output has exceeded 650 billion kilograms for six consecutive years, bringing the production capacity to new heights. The self-sufficiency ratio of rice and wheat has been maintained above 100%, and that of corn above 95%. There are diverse and adequate supplies of meat, eggs, milk, fruit, vegetables, and tea, meeting the increasing consumption demands of the people.

Second, agricultural modernization has reached a new level. The contribution of advances in agricultural science and technology to agricultural production has exceeded 60%. The overall level of mechanization in plowing, sowing, and harvesting exceeded 70%. All farmland used for planting major crops nationwide has been sown with superior strains of crop. There are now more than 1 million family farms, 2.23 million farmers' cooperatives, and 893,000 commercial organizations that provide agricultural services. These organizations have become the mainstay of modern agriculture, better aligning smallholder farming and the development of modern agriculture. The use of fertilizer and pesticides has registered negative growth for the three years in a row. The acceptance rate of agricultural products under quality monitoring has been maintained above 97%. Putting quality first and adhering to green development have become dominant themes in modern agriculture.

Third, the target of doubling farmers' income has been achieved ahead of schedule. In 2019, the per capita disposable income of rural residents exceeded 16,000 yuan, doubling 2010's figure one year ahead of schedule, and marking a growth rate faster than that of urban residents for the 10th year in a row. The gap between urban and rural incomes has also narrowed, falling from 2.73:1 in 2015 to 2.64:1 in 2019. In the first three quarters of this year, the per capita disposable income of rural residents grew by 1.6% in real terms to 12,297 yuan. The growth rate will continue to rise in the fourth quarter. In the year for completing the building of a moderately prosperous society in all respects, farmers will have a stronger sense of gain and happiness.

Fourth, decisive achievements have been made in the fight against poverty. By the end of this year, all of China's poor as defined by the current standards will be lifted out of poverty, all 832 impoverished counties will be removed from the poverty list, and the overall regional poverty problem will be resolved. The poverty alleviation policies with an aim of supporting local industries cover 98% of poverty-stricken households. In poverty-stricken areas, more than 1 million poverty alleviation projects that support local industries have been implemented and more than 300,000 poverty alleviation industrial bases have been built. Each poverty-stricken county has formed a leading industry with distinctive characteristics and the capacity to erase poverty. Poverty alleviation through supporting local industries has become the measure with the widest coverage, mobilizing the largest number of people and having the most effective results.

Fifth, rural revitalization has achieved a good start. The rural revitalization strategic plan was issued and implemented, the CPC's rural work regulations were promulgated and implemented, and the rural revitalization institutional framework has mostly taken shape. The penetration rate of rural sanitary toilets has exceeded 65%, while the coverage rate of the collection, transportation, and disposal system for domestic waste in administrative villages has exceeded 90%. Meanwhile, the three-year action objectives and tasks for the improvement of rural human settlements have been largely completed. Additionally, the construction of infrastructure such as rural water, electricity, road and communications facilities has been accelerated, the level of public services such as education, medical care, and elderly care has been continuously improved, the rural governance system has been further improved, and the rural areas are now taking on a new look.

Sixth, rural reforms continue to deepen. The basic rural management system has been further consolidated and improved and more than 200 million rural households have received certificates of land contract management rights. After the second round of land contracts expired, a new land contract policy which allows the validity period be extended for another 30 years upon expiration was promulgated. Elsewhere, significant progress was made in the "three-rights separation" system for separating ownership rights, contract rights, and management rights for contracted rural land. A new round of rural homestead reform pilot projects was also launched. The asset and capital verification of rural collective assets have for the most part been completed and the identities of more than 600 million collective members has been confirmed. The supporting and protection system and institutions for agriculture have been gradually improved and an ecological-oriented agricultural subsidy system has been established. Policy to adjust and improve the use of land transfer income with a priority to supporting rural revitalization has been issued. The main framework of rural reform is now basically in place.

These achievements are the result of the overall arrangement and strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core, the result of hard work and unremitting efforts by hundreds of millions of farmers and officials, and the result of continuous improvement and persistent reinforcement of policies to strengthen agriculture, benefit farmers, and raise rural living standards.

During the 14th Five-Year Plan period, we will firmly establish a new development concept, implement demands for high-quality development and new development patterns, adhere to the general guideline of prioritizing agricultural and rural development via the implementation of the rural revitalization strategy. We shall also steadily improve the security level of important agricultural products such as grain, strive to improve the quality, efficiency, and competitiveness of agriculture, focus on strengthening the construction of beautiful and livable villages, consolidate and improve the results of poverty alleviation, continue to deepen rural reforms, and improve the rural governance system to accelerate the modernization of agriculture and rural areas.

Next, my colleagues and I will answer your questions.

Shou Xiaoli:

Thank you, Mr. Liu Huanxin. Now let's begin the question and answer session. Please state the news outlet you represent first.

CCTV:

During the 13th Five-Year Plan period, in order to adapt to the people's need from eating to allay their hunger to eating for nutrition, the focus of agricultural development has been shifted from a quantity-oriented to quality-oriented approach. I want to know, after five years of hard work, what measures have been taken to maintain the security of important agricultural products such as grain? What are your next considerations? Thank you.

Liu Huanxin:

This question is a very good one, and it is also an issue of great concern to all sectors of society and the general public. As you said, people's living standards have improved and consumption is changing from eating to allay their hunger to eating for nutrition and health. To effectively meet the upgraded consumption needs of the common people, agricultural and rural departments at all levels continue to deepen the supply-side structural reforms of the agriculture, vigorously promote measures to revitalize agriculture through high-quality and green development, and to strengthen agriculture by building brands. The supply levels of important agricultural products such as grain has increased significantly. Next, I will summarize it in three aspects:

First, adequate supply. Food supply has always been our top priority in the last five years. We have vigorously implemented strategies to ensure the supply of important agricultural products, and the supply of grain and important non-staple food has been adequate. Grain production has further increased and stabilized at above 1.3 trillion jin (650 billion kilograms) annually, guaranteeing each citizen 470 kilograms of grain on a yearly basis. This is much higher than the internationally recognized food safety line of 400 kilograms. We have worked to ensure food supply for 1.4 billion Chinese people through our own efforts. The production capacity for cotton, edible oil and sugar also improved. We also saw good harvests for products included in the "vegetable basket" (non-grain food supply). In 2019, China produced 77.59 million tons of meat, 33.09 million tons of eggs, 32.01 million tons of milk, 274 million tons of fruit, 721 million tons of vegetables, and 64.8 million tons of aquatic products. And the overall output of these products is expected to steadily increase this year. I would say that the "rice bag" (grain supply) and "vegetable basket" (non-staple food supply) are both diversifying. As long as there is demand, there is supply. 

Second, better structures. Led by market demands, we have improved the agricultural structure in the last five years. The supply of green and quality agricultural products has increased significantly. The structure of crop planting has continued to improve. In the past, wheat was mainly used to make steamed buns and noodles, but now 35.8% of the wheat planted is high- and low-gluten wheat used to make bread, cakes and pastries. The planting area of quality rice has further expanded; the soybean planting area has increased annually for five consecutive years; the cultivated land change from growing grain crops to cultivating feed crops has exceeded 15 million mu (1 million hectares), and a production mix of food, cash, and fodder crops has initially taken shape. Animal husbandry is also upgrading at a faster pace. The proportion of large-scale hog breeding has reached 53% of all hog breeding. Beef and mutton production also increased rapidly. More and more consumers are now choosing domestically produced milk powder, meeting the need for a consumption structure upgrade. 

Third, improved quality. We have attached greater importance to quality and safety in the last five years. To ensure quality production and supervision, we have set up a production standard system for edible agricultural products and fully implemented the system for granting certificates of quality. Quality and safety monitoring show that over 97% of agricultural products are up to standard. We now have more robust measures in place to ensure food safety. More than 49,200 agricultural cases have been granted certificates for green, organic or GI (Geographical Indication) products. More and more green and quality agricultural products are now available in the supermarkets and on dining tables.  

Next, to better meet people's growing expectations for a better life, we will implement strategies to ensure the supply of important agricultural products, continue to deepen the supply-side structural reform in agriculture and implement a regional production and supply plan for important agricultural products. In addition, we will continue to stabilize grain production, increase the supply of products included in the "vegetable basket," improve the structure of agricultural products, and enhance their quality, efficiency and competitiveness. Thank you.

The Poster News APP:

What measures have the Ministry of Agriculture and Rural Affairs taken to accelerate the integration of the primary, secondary and tertiary industries in rural areas during the 13th Five-Year Plan period? How effective are the measures? Thank you. 

Liu Huanxin:

The integration of the primary, secondary and tertiary industries is a crucial issue in agricultural and rural development. I will first invite Mr. Wei to answer the question. 

Wei Baigang:

Thank you for your question. In 2015, the State Council's General Office released the Guidelines on Advancing the Integration of Primary, Secondary and Tertiary Industries in Rural Areas. In the past few years, all departments in all locales have earnestly put in place the decisions and plans of the CPC Central Committee and the State Council on accelerating industrial development in rural areas. Based on agricultural resources and other resources of the rural areas, we have accelerated the development of industries that can increase farmers' incomes; speed up the integration of the primary, secondary and tertiary industries; and made great efforts to keep more jobs in the rural areas and to give more added value of the secondary and tertiary industries to farmers. I'd like to summarize the measures and their results in the following aspects. 

First, we have vigorously developed the agricultural product processing industry. In 2019, China was home to 1,600 agricultural products processing parks and 81,000 processing enterprises above designated size. The industry reported revenue of more than 22 trillion yuan and created over 30 million jobs.  

Second, we have vigorously developed industries with rural characteristics. A number of characteristic industrial towns with an output value of over one billion yuan have been built as well as characteristic industrial villages with an output value of over 100 million yuan. A number of rural craft technologies have been discovered.

Third, we have accelerated the development of rural leisure tours. We have built a number of high-quality leisure scenic spots and promoted a variety of key leisure and tourist itineraries. In recent years, the Ministry of Agriculture and Rural Affairs has promoted a total of 1,000 high-quality rural itineraries for tourists, making them popular among urban residents wishing to travel to the countryside during the National Day holiday. In 2019, rural recreational tourism received 3.2 billion tourists with its revenue exceeding 850 billion yuan.

Fourth, we have boosted the growth of new rural services. In 2019, the output value of agriculture, forestry, animal husbandry, the fishery industry and supporting activities reached 650 billion yuan. There were more than 30,000 agriculture-related e-commerce businesses. Rural online sales reached 1.7 trillion yuan, including 400 billion yuan from online sales of agricultural products.

With the strong support of favorable policies, we have speeded up the building of platforms for rural industry development. A total of 151 modern national agricultural parks have been set up nationwide. This has encouraged local authorities of provinces, cities and counties to develop more than 3,000 modern agricultural parks and over 1,000 agricultural associations, as well as more than 800 towns with a prosperous agricultural industry. The rapid growth of rural industry and the accelerated integration of primary, secondary and tertiary sectors now provide important support in increasing employment and incomes for farmers and a significant growth pole for rural economic development.

Next, the Ministry of Agriculture and Rural Affairs will continue to pursue supply-side structural reform of agriculture. Our main tasks are to keep striving to build platforms for the integrated development of primary, secondary and tertiary sectors in rural areas, focus on key industries, attract resources, boost innovation and leadership, extend the industrial chain, and upgrade the value chain so as to accelerate the formation of rural development pattern in which farmers, enterprises and society all participate. Thank you.

Farmers' Daily:

The public is concerned about progress in toilet renovation and the disposal of wastewater and garbage. What progress has been made in the Three-Year Action Plan for Improving the Rural Living Environment? And what achievements have been made? Thank you.

Liu Huanxin: 

Let's give the floor to Mr. Wu Hongyao, a member of the CPC Leading Group of the Ministry of Agriculture and Rural Affairs, to take that question.

Wu Hongyao:

Thank you. Let me answer the question. Both the CPC Central Committee and the public have attached great importance to improving the rural living environment. At the beginning of 2018, the General Office of the CPC Central Committee and the General Office of the State Council issued the Three-Year Action Plan for Improving Rural Living Environment. The Office of the Central Rural Work Leading Group and the Ministry of Agriculture and Rural Affairs, in collaboration with relevant authorities, have actively played a leading role in making solid progress in implementing the Three-Year Action Plan by learning from Zhejiang's experience in village renovations in accordance with the policies and plans of the CPC Central Committee and the State Council. Renovation work is now underway nationwide, with major progress being made. The goals and tasks set in the plan have mostly been completed.

First, most villages have become clean and tidy. At the end of 2018, 18 departments, including the Office of the Central Rural Work Leading Group and the Ministry of Agriculture and Rural Affairs, launched a village cleaning campaign. A series of activities were organized to encourage farmers to take spontaneous action in cleaning up rural household garbage, village ponds and ditches, as well as agricultural waste such as manure from livestock and poultry breeding. Farmers were further encouraged to change bad habits that adversely affect the rural living environment. Strict and coordinated measures have been taken against the problem of dirtiness and untidiness in villages. More than 95% of villages have taken part in cleaning-up activities, and the appearance of these villages has been significantly improved.

Second, we have made solid progress in the rural toilet revolution. We have always tailored our measures to local conditions when implementing policies and have given priority to quality. We have guided local authorities to prioritize the promotion of toilet renovation in Class-I counties, while steadily promoting the work in Class-II counties and launching trials of the work in Class-III counties by issuing policy documents, holding deployment meetings, enhancing technical support, carrying out supervision and inspection, and promoting publicity and training. We urged the local authorities to improve the quality and effectiveness of rural toilet innovation and ensured that the public is satisfied with the work. Currently, more than 65% of rural areas are equipped with sanitary toilets. Since 2018, more than 30 million rural toilets have been renovated. 

Third, we have made coordinated efforts in promoting the treatment of rural household garbage and sewage. We have actively cooperated with relevant departments to strengthen rural household garbage and sewage treatment and improve the construction, management and protection mechanisms. At present, the system of rural household garbage collection, transportation and disposal has covered more than 90% of the country's administrative villages. A total of 99% of the 24,000 unqualified garbage sites identified nationwide have been cleaned up, and the rural sewage treatment has been improved.

Next, we will improve the rural living environment as required in the 14th Five-Year Plan on the basis of summarizing the effects of implementing the Three-Year Action Plan. We will continue to improve the rural living environment in order to give farmers a greater sense of gain and happiness. Thank you.

The Cover: 

Corn prices have been rising rapidly since the beginning of this year. We have noted that the Ministry of Agriculture and Rural Affairs explained that one of the reasons for the high price is the strong demand and reluctance of farmers to sell. What measures are the ministry taking to deal with this issue? Thank you.

Wei Baigang: 

Thank you for your interest. As you said, the price of corn has risen recently and people have been paying close attention to the corn market. We responded to this issue at the press conference held by the Ministry of Agriculture and Rural Affairs several days ago.

Since the beginning of this year, the price of corn did go up. In September, with new corn from the north and northeast of China coming into the market, prices began to fall. After the National Day holiday, the price then rose again. As far as we know, the listed purchase price of corn in some parts of Jilin province is around 2.34 yuan per kilogram, and that of some regions in Heilongjiang province is around 2.2 yuan per kilogram. According to our analysis, there are three reasons for this price rise. 

First, demand is strong. As the production of pigs is recovering and speeding up, the demand for corn for feed has increased. At the same time, the demand for alcohol and related products, including corn starch, is also increasing. The price has increased because processing enterprises and traders are generally optimistic about the corn market.

Second, costs have increased and farmers are reluctant to sell. This year, the impact of typhoons on the corn yield in northeast China has been limited, but corn stalk lodging occurred in some areas, resulting in higher costs for harvesting. Our research shows that the cost of harvesting lodged corn by machine is around 100 yuan higher per mu than during normal years. Farmers say that each extra ear of corn can earn them 40-50 cents more. After harvesting, they have tended to wait a few days when having seen that prices were rising.

Third, capital speculation. Affected by the global pandemic, domestic and foreign investment markets have shown greater interest in the grain market. Since October, international and domestic corn futures prices have risen significantly, and traders and processing enterprises are expected to increase bullish expectations, leading to a rise in spot prices. Corn prices are set to stabilize in the near future.

We believe that this round of corn price hike is a restorative rise following on from the reform of the collection and storage system, which is mainly the result of market effects. In the future, the decisive role of the market in the allocation of resources will still be brought into play. We will also work with relevant departments to ensure the corn supply and endeavor to increase grain production and supply. At present, the corn harvest is 90% complete, and a bumper harvest is in sight. The next step is to guide all regions in harvesting and drying work, so as to ensure that the harvest of autumn grains is plentiful and can be sold as soon as possible. Relevant departments will strengthen their supervision of corn warehouse auctions in the early stage, and urge buyers and sellers to timely get goods available on the market as soon as possible. At present, stocks of rice and wheat are sufficient, while some can be auctioned for feed. In short, the corn supply will gradually increase in the later period, and there is no support for corn prices to continue rising. Thank you.

Economic Daily: 

In 2018, the CPC Central Committee and the State Council issued the "Strategic Plan for Rural Revitalization," which clarified the overall objectives and priorities involved in rural revitalization. How has the implementation of the strategy progressed? Thank you.

Liu Huanxin:

The implementation of the rural revitalization strategy was an important strategic decision made by the 19th CPC National Congress. The strategy is off to a good start following several years of hard work. Mr. Wei Baigang, chief economist, will answer this question.

Wei Baigang:

Thank you for your interest. The 19th CPC National Congress made a major decision and deployment to implement the rural revitalization strategy, and clearly proposed the general requirements of industrial prosperity, ecological livability, rural civilization, effective governance and rich life. General Secretary Xi Jinping has paid close attention to the promotion of rural revitalization, and made a series of important instructions promoting rural industrial revitalization, talent revitalization, cultural revitalization, ecological revitalization and organizational revitalization. At present, seven aspects and 59 key tasks of the strategic plan are progressing smoothly, and 82 major projects, actions and plans are advancing in an orderly manner. Various regions have carried out demonstration and leading work in rural revitalization, and explored and set a number of good examples such as in improving the living environment, promoting industrial parks, building beautiful villages, and constructing rural civilization. The rural revitalization work gets off to a good start.

First, a mechanism with "Party secretaries at five levels" (provincial Party committees, municipal Party committees, county-level Party committees, township-level Party committees and village-level Party committees) responsible for the work of rural revitalization has been established nationwide. The CPC Central Committee has issued a set of regulations for the country's rural work, specifying the major responsibilities of these five levels of Party secretaries in implementing the strategy for rural revitalization. Leading agencies for the implementation of the strategy have been established in 31 provinces (autonomous regions and municipalities), with provincial Party secretaries and governors serving as heads of the leading groups in most regions. A sound evaluation system has also been established in order to better evaluate and supervise performances in carrying out the strategy.

Second, in carrying out the strategy for rural revitalization, we have been following the procedure of "planning followed by implementation" by local governments at different levels. The CPC Central Committee and the State Council have issued a national rural revitalization strategic program, setting out the goals and tasks that shall be completed by 2020. 31 provinces, autonomous regions and municipalities have also made their own plans so as to align their work with the national program and strictly implement every single task stipulated in the program. Township and village governments have been increasing efforts to formulate their own implementation plans, and some villages have combined separate plans into a single program where conditions allow, thereby making the work more feasible. The Ministry of Agriculture and Rural Affairs has cooperated with some eastern coastal provinces with advanced economies — including Zhejiang, Guangdong, Jiangsu and Shandong - in order to help the eastern coastal areas and other regions where conditions allow achieve basic modernization of agriculture and rural areas. For poverty-stricken areas in central and western China, eliminating poverty is their top priority in implementing the strategy for rural revitalization, and they will win the battle against poverty soon.

Third, the policy framework for rural revitalization has been established. The CPC Central Committee has issued a series of major documents to enhance the rural living environment, revitalize rural industries, strengthen rural governance, improve social etiquette and civility in rural areas, and has created the Chinese farmers' harvest festival. Relevant departments have instituted policies to boost financial services, attract talented personnel, and improve technological services, road building as well as education, amenities, and healthcare services in rural areas. We have also stepped up efforts to establish a mechanism to plan, construct, manage and protect infrastructure in urban and rural areas in a coordinated manner. Moreover, we have been ramping up efforts to ensure that basic public services in urban and rural areas will be provided in accordance with unified standards and systems.

Fourth, a series of landmark projects have been launched. Following the principles of focusing on priorities, addressing inadequacies and shoring up points of weakness, we have launched a set of major projects. These include renovating the rural living environment, constructing high-standard farmland, innovating agricultural technology, creating national-level modern agricultural industrial parks, protecting black-soil farmland in northeast China, and building cold chain logistics facilities for the storage and preservation of agricultural products. These projects have further strengthened the material foundation for the development of agriculture and rural areas.

Going forward, we will follow the deployments and requirements made by the CPC Central Committee, focus on the goals of rural revitalization, and work hard to achieve a good performance in all areas, so as to ensure that decisive progress is made by 2035, with the basic modernization of agriculture and rural areas. By 2050, rural areas should have strong agriculture, a beautiful countryside and well-off farmers. Thank you.  

Hong Kong Commercial Daily:

Technology and equipment are necessary when it comes to the development of modern agriculture. Could you please introduce the progress China has made in the construction of agricultural infrastructure during the 13th Five-Year Plan period? What will the priorities be in the future? Thank you.

Liu Huanxin:

Advanced equipment serves as an essential support in the development of modern agriculture. Improving investment in agricultural infrastructure has always been a priority as stated in "the No. 1 central document" during the 13th Five-Year Plan period. A large number of major projects have been constructed, thereby significantly increasing fixed asset investment in the primary industry. Fixed asset investment in the primary industry between 2016 and September 2020 hit 8.64 trillion yuan, around 1.66 times the level during the 12th Five-Year Plan period. Since 2020, we have been working hard to push local governments to issue special bonds for the development of agriculture and rural areas, so as to overcome the effects of COVID-19 on agricultural and rural investment. A total of 120.2 billion yuan in local government special bonds was issued between January and September, thereby significantly expanding channels for investment and financing. The agricultural infrastructure has witnessed remarkable improvements since the beginning of the 13th Five-Year Plan period. Moreover, technology and equipment have advanced rapidly. The progress can be seen in four aspects:

First, we have significantly scaled up the development of high-standard farmland. By the end of the 13th Five-Year Plan period, we will have completed the construction of 800 million mu (53.3 million hectares) high-standard farmland capable of producing stable, high yields despite drought or flood conditions, and enhanced the disaster resilience and disaster-risk reduction capabilities in agriculture. Grain output will have increased by around 100 kilograms per mu. We have launched a campaign to protect and enhance the soil fertility of cultivated land, and increased efforts to better utilize and conserve black soil in northeast China. We took various measures to combat arable land degradation. In 2019, the average grade of cultivated land across China reached 4.76, up 0.35 from 2014. We also accelerated the construction of efficient water-saving irrigation facilities in rural areas, and the effective utilization coefficient of farmland irrigation water now stands at 0.559.

Second, we have improved our capabilities for breeding superior crop varieties. We established a seed cultivation system featuring three national seed cultivation and production centers in Hainan, Gansu and Sichuan provinces, as well as 52 national seed-producing counties and 100 regional seed cultivation bases. The National Crop Genebank of China (NCGC) is expected to store 1.5 million seed accessions when completed, which will rank the first in the world in terms of conservation abilities. China's modern seed industry has made important breakthroughs, with major crops upgraded and 95% of farmland area planted with domestically cultivated seeds.

Third, the mechanization of agriculture has been developed in an all-round way. The level of mechanization has been rapidly upgraded and the total power of agricultural machinery reached 1.028 billion kilowatts. A total of 453 counties have been built as pilot areas for whole-process mechanization of major crop production. The mechanization of agriculture in hilly and mountainous areas has been accelerated. The overall level of mechanization in plowing, sowing and harvesting exceeded 70%, while the mechanization rate for livestock breeding and aquaculture reached 34% and 30%, respectively. Agricultural mechanization now also covers more areas, including plant protection, straw processing and drying.

Fourth, we have boosted upgrade facilities for livestock and aquatic farming. The construction of livestock housing, automatic feeding, and disease prevention and control facilities has been accelerated. As much as 64.5% of livestock and poultry farming is now carried out on a large scale, and 93% of farms are equipped with manure disposal systems. We have made greater efforts to stimulate the development of the dairy industry. We have supported the upgrade of facilities for dairy farming and built a number of high-quality forage bases. A total of 64% of dairy farming is now carried out on a large scale. We have also promoted the transformation and upgrading of the fishing industry. More than 5,400 national demonstration farms for healthy aquaculture have been established. 

We are currently compiling the 14th Five-Year Plan for agricultural and rural development. We plan to conduct a series of major projects to support the sustainable and strategic development of agriculture, mainly focusing on high-standard farmland, the modern seed industry, cold chain storage and logistics, digital agriculture and rural areas, prevention and control of animal and plant diseases, major scientific infrastructure, as well as other forms of infrastructure. We will increase efforts to improve the level of modern agricultural facilities and equipment. Thank you. 

CNR:

Many leading pig producers in China have predicted that the price of pork will not return to normal until the second half of 2021. What's your take on that？ Thank you. 

Liu Huanxin:

This is a question that is close to our daily lives and people's livelihoods. In recent years, people have paid close attention to this. I would like to invite Mr. Wei to answer this question.

Wei Baigang:

Thank you for your question. I have spoken about pig production resumption and pork prices several times. The change in prices is dependent on supply and demand. Since the beginning of this year, local governments have fully implemented the polices made by the CPC Central Committee and the State Council to support the production of hogs. We support pig farms to boost production and increase efforts to prevent and control the African swine fever. In the first three quarters of this year, 12,500 new large-scale pig farms were built and put into production, and 13,400 empty pig farms re-stocked. By the end of September, pig stocks have reached 370 million, or 84% of the level at the end of 2017, while there were 38.22 million breeding sows, or 86% of the level of end-2017.

As hog production has resumed, more hogs have been slaughtered for market. As a result, pork prices have declined for eight consecutive weeks. At present, the price of pork in wholesale markets is 49.23 yuan per kilogram, a decrease of 10.41 yuan compared to its high in February. The downward trend is obvious.

Looking to the future, the supply of pork is improving. According to recent expert research, when taking factors such as the resumption of hog production, pork imports and consumption demand into consideration, the supply of pork during the two future major holidays of the New Year's Day and Spring Festival will increase by around 30%. Generally, the price will be lower than the same period last year, and there will be no significant rise in prices. As the number of breeding sows and pig stocks increase, the supply will also quickly follow. When the supply goes up, prices will gradually return to normal. Thank you.

People's Daily:

We felt in our interviews, farmers pay high attention to and very much expect to see rural reforms. What progress and achievements have been made in this regard during the 13th Five-Year Plan period? What measures will be taken in the next stage? Thank you.

Liu Huanxin:

Rural reforms are the driving force of rural development. The CPC Central Committee and the State Council attach great importance to the reforms. Through joint efforts across the entire country, the reforms have continuously deepened in recent years and significant progress has been made. Let's invite Mr. Wu from the Ministry of Agriculture and Rural Affairs to answer your questions.

Wu Hongyao:

Since the beginning of the 13th Five-Year Plan period, the Agricultural Office of the CPC Central Committee, the Ministry of Agriculture and Rural Affairs, and other relevant government departments have deepened rural reforms in an all-round way in accordance with the arrangements of the CPC Central Committee and the State Council, making remarkable progress and scoring many achievements. They can be summarized as "a batch in three aspects." First, we introduced a batch of reform plans with top-level design. Second, we carried out a batch of pilot reforms that made in-depth breakthroughs. Third, we established a batch of mature legal systems. Through the reforms, we preliminarily set up pillars and provided institutional and policy support for implementing the rural vitalization strategy. Achievements were demonstrated in six ways.

First, significant progress was made in reforming the rural land system. The verification, registration and certification of land contracts and management rights was successfully completed. A system of separating rights between ownership, contracts, and management was preliminarily established. The Law on Rural Land Contracting was revised. The CPC Central Committee also announced the extension of the second round of rural land contracts by another 30 years, giving farmers assurances in ownership over the long run. The pilot plan for reforming the rural homestead system was also published, marking the launch of a new round of pilot reforms. At the same time, the marketization of rural collective land designated for commercial construction and reforms in rural collective land requisition were in steady progress.

Second, steady steps were made in reforming the rural collective property rights system. The check and verification of rural collective assets were completed smoothly. A total of 6.5 trillion yuan of rural collective assets and 6.55 billion mu of land resources were checked and verified nationwide. A total of 438,000 villages completed reforms that saw productive assets converted into shares and over 600 million members of collective economic organizations were confirmed.

Third, the construction of new agricultural operational systems was accelerated. We implemented programs to cultivate family farms and upgrade farmers' cooperatives. Now there are over one million family farms and over 2.2 million farmers' cooperatives in China. We also supported producer services in agriculture and expanded the number of organizations providing services for agricultural production to 440,000. The commercial and specialized services in agriculture brought small rural households into line with modern agriculture methods and explored a path of agricultural modernization with Chinese characteristics.

Fourth, the system of supporting and protecting agriculture was further improved. We implemented the national food security strategy, adhered to the principle of increasing food crop production based on farmland management and the application of technology, and put into place the strictest system of arable land protection. We designated 1.55 billion mu for permanent basic cropland and 1.088 billion mu for functional grain production and designated protected zones for the production of major agricultural products. We also improved price-setting mechanisms for agricultural products as well as the system for their purchase and storage and established a system for subsidizing agricultural production, all of which achieved positive results.

Fifth, notable achievements were made in developing the rural governance system. A rural governance system under the leadership and organization of the CPC was established preliminarily, integrating self-governance, rule of law, and rule of virtue. The role of community-level Party organizations in leading Party members to devote themselves to reform and the vanguard as well as exemplary role of Party members were brought into full play. We also saw increasingly standardized villagers' self-governance organizations, further highlighted the rule of law in rural construction, and promoted a basically sound mechanism for governing rural customs.

Sixth, solid moves were made to integrate urban and rural development. We made steps to offer urban and rural areas equal access to basic public services as well as set up universal basic aged-care pension, basic medical insurance, and serious illness insurance systems for both urban and rural residents. A total of 95 percent of China's counties passed the assessment for balanced development in compulsory education. Major progress was also made in reassigning rural populations permanent urban resident status. Public employment and entrepreneurship servicing both urban and rural areas equally were also improved significantly.

Next, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we will pay more attention to improving agriculture policies in rural areas and for farmers, continue to handle relationships between farmers and landowners, and launch major reforms to improve the rural property rights system and the mechanism for market-based allocation of production factors. In doing so, we aim to promote the free flow and equal exchange of urban and rural production factors, fully stimulate the internal driving forces of rural development, and offer stronger institutional support to the all-round vitalization of rural areas. Thank you.

Shou Xiaoli:

Thank you, Mr. Liu, and thanks to all the other speakers and media friends. That's all for today's press conference.

Translated and edited by Zhang Liying, Yuan Fang, Zhang Rui, Li Huiru, Wang Yanfang, Xiang Bin, He Shan, Gong Yingchun, Cui Can, Zhang Junmian, Zhang Jiaqi, Zhou Jing, Wang Qian, Duan Yaying, David Ball, Laura Zheng, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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Read in Chinese

Speakers:

Wang Zhijun, vice minister of industry and information technology

Lu Shan, director of the Planning Department of the Ministry of Industry and Information Technology (MIIT)

Wen Ku, director of the Telecom Development Department and spokesperson of the MIIT

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Oct. 23, 2020

Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to the press conference of the State Council Information Office (SCIO). During the 13th Five-Year Plan period (2016-2020), remarkable achievements have been made in the reform and development of China's industry and information technology sectors. In order to help people better understand related issues, we are very pleased to be joined by Mr. Wang Zhijun, vice minister of industry and information technology, who will brief you on the development of industry and telecommunication during the 13th Five-Year Plan period (2016-2020) and take your questions.

Also taking part in the press conference today are Mr. Lu Shan, director of the Planning Department of the Ministry of Industry and Information Technology (MIIT), and Mr. Wen Ku, director of the Telecom Development Department and spokesperson of the MIIT.

First of all, I would like to invite Mr. Wang to make his opening statement.

Wang Zhijun:

Friends from the media, ladies and gentlemen, good afternoon. Welcome to today's press conference. I would like to thank you for your long-term interest and support in the development of China's industry and information technology sectors. With regards to the progress in building China into a manufacturing and cyber power during the 13th Five-Year Plan period, Minister of Industry and Information Technology Xiao Yaqing has written a signed article published on the People's Daily. We have provided you all with a printed copy for your reference. Now, I will briefly introduce the development of industry and information technology during the period.

General Secretary Xi Jinping has stressed that we should "work faster to build China into a manufacturer of quality, develop advanced manufacturing, and promote further integration of the internet, big data, and artificial intelligence with the real economy." The 13th Five-Year Plan period is the first crucial stage in building China into a manufacturing and cyber power. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, industry and information technology agencies at all levels have implemented the decisions and plans made by the CPC Central Committee and the State Council and continued to follow the general principle of pursuing progress while ensuring stability. We have steadfastly advanced supply-side structural reform and made concrete efforts to build China into a manufacturer of quality and a cyber power.

All the main tasks and targets laid out in the 13th Five-Year Plan are to be fulfilled as scheduled, with overall strength in industry and information technology being raised to new heights. Society has attached greater importance to the real economy as well as the development of industry and information technology. The integration of industrial processes and information technology has reached a much higher level, and solid progress has been made in building China into a manufacturer of quality and a cyber power.

From 2016 to 2019, China's industrial added value increased from 24.54 trillion yuan to 31.71 trillion yuan. This represents an average annual growth of 5.9%, which is much higher than the global average of 2.9% during the same period. In 2019, China's value-added in manufacturing reached 26.9 trillion yuan, accounting for 28.1% of the global total, with the country remaining the world's largest manufacturer for 10 consecutive years. The R&D spending of industrial enterprises above designated size reached 1.43% of the income from their main business operations, exceeding the target of 1.26% ahead of schedule.

The supply system has continuously improved, and the transformation and upgrading of traditional industries has accelerated. From 2016 to 2019, the investment in upgrading technologies has risen from 40.6% to 47.1% as a proportion of total industrial investment. Significant achievements have been made in cutting overcapacity. The target for reducing steel production capacity by 150 million tons set out in the 13th Five-Year Plan has been completed two years ahead of schedule. Energy consumption per unit of industrial added value created by enterprises above designated size has continued to decline. Strategic emerging industries have developed at a faster pace. The value-added by high-tech manufacturing and equipment manufacturing respectively accounted for 14.4% and 32.5% of total value-added created by industrial enterprises above designated size. The two industries have become main forces driving the development of manufacturing.

Since the beginning of the 13th Five-Year Plan period in 2016, major breakthroughs have been achieved in a group of key technologies and products. China's Chang'e-4 lunar probe landed on the far side of the moon; launch missions for the Long March-5 carrier rocket series were successfully conducted; the Tianwen-1 Mars probe blasted off; construction of the BeiDou Navigation Satellite System (BDS) was completed; China's first domestically built polar research vessel and icebreaker, Xuelong 2, joined Xuelong on the country's 36th Antarctic expedition; the Fuxing series of bullet trains which travel at 350 kph began large-scale operation; and breakthroughs were made in new materials, such as materials for large passenger plane C919, and glass substrates for flat panel displays.

The Beijing-Tianjin-Hebei region, Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area have increasingly played a leading role in promoting the innovation-driven development of manufacturing. Foreign investors' access to China's general manufacturing sector has gradually increased, and important progress has been made in improving opening-up and cooperation. The influence of these sectors on global industrial and value chains has noticeably grown.

The information and communications sector has maintained steady and rapid growth and is playing a major pioneering role in driving economic growth. As internet infrastructure continues to upgrade, our internet penetration goals have been fulfilled ahead of time. By the end of 2019, the household penetration rate of fixed broadband and the user penetration rate of mobile broadband had reached 91% and 96%, respectively. Over 80 million households had access to a 1,000-megabyte fiber internet connection, and over 1.2 billion people were subscribed to a 4G network. The commercial use of 5G is making solid headway. China now has 690,000 5G base stations nationwide, benefiting over 160 million users. The number of server racks in China's data centers has reached 2.2 million, with the average annual growth surpassing 30%. People are enjoying an increased sense of fulfillment. The country has up to 90,000 value-added telecom companies, tripling the number in 2015. The average rates for mobile internet services have been cut by 95% compared to rates in late 2015. China has also launched a campaign to clean up mobile apps that infringe on the legal rights of mobile users. We have well achieved the goal of telecom universal services. Fiber internet connections and 4G networks are both available to 98% of China's administrative villages, driving nationwide efforts for poverty alleviation and rural vitalization.

A sound industrial ecosystem is taking shape in which enterprises of all sizes are pursuing development through collaboration. China is now home to more leading and globally competitive enterprises. The country now features 133 companies on the Fortune Global 500, the most from any one country in the world, and 23 more than in 2016. A total of 14 companies made it onto the 2019 Forbes Digital 100 List, with China Mobile and Alibaba among the top 10. China has also implemented various preferential policies to help companies navigate difficulties, taken measures to improve the policy system for small and medium-sized enterprises (SMEs), and made step-by-step efforts to upgrade government services in order to stabilize entities and drive employment. In information and telecoms, rail transportation, and the new energy vehicles sector, China has also witnessed several SMEs grow into market leaders with strong innovation capacities and international competitiveness. SMEs have seen a significant improvement in their specialization, vitality and competitiveness.

We have also seen a deeper integration of industrialization and informatization. Smart manufacturing technologies are being applied in the construction of digital workshops and smart factories. Industrial internet has made major progress as its networks, platforms, and safety systems continue to develop, with integrated applications now covering over 30 major sectors in the national economy. New business forms and models like smart manufacturing, internet collaborations, customization, servitization, and digital management are gaining momentum. Moreover, the digital economy is booming and transactions in both e-commerce and mobile payment rank first in the world. As big data, cloud computing, the internet of things, and artificial intelligence technologies are increasingly applied to socioeconomic development, we have seen a surge of numerous new business forms and models.

In the face of the COVID-19 pandemic and the complicated domestic and international environment, we have resolutely implemented the decisions and arrangements made by the Central Committee of the Communist Party of China (CPC). We made all-out efforts to guarantee medical supplies, and took the lead in ensuring supplies for epidemic prevention and control and promoting the resumption of work and production, which provided strong support for keeping economic fundamentals stable. Made-in-China products have not only contributed to the domestic and global battle against COVID-19 but also to economic recovery. The value added of industrial enterprises above designated size grew 1.2% year over year in the first three quarters of the year, with the growth rate hitting 5.8% in the third quarter and 6.9% in September. China's industrial sector is on a path of sustained and stable recovery, featuring an accelerating industrial output, the better dovetailing of production and marketing, and the significantly increasing confidence of market entities.

Currently, China is undergoing a crucial and challenging stage in the development of its industry and communications sector. In the face of a complicated domestic and international environment, we will, under the firm leadership of the CPC Central Committee with Comrade Xi Jinping at its core, apply the new development philosophy, study and explore ways for the development in industry and communications, put our comparative advantages to the best use, defuse risks and meet challenges head-on, seize strategic opportunities, hold the initiative in development, and remain firm in our commitment to pursuing development in manufacturing and cyberspace. In order to promote high-quality development, we will continue to deepen the supply-side structural reform, follow the guidelines to consolidate foundations, strengthen areas of weakness, highlight strengths, and upgrade the business environment. We will speed up building a modern industrial system, and foster a new, dual-cycle development architecture with the domestic cycle as the mainstay andwith domestic and international development reinforcing each other. These methods will help to make a good start for the development of a modern socialist China in all respects. Thank you.

Shou Xiaoli:

Now, the floor is open for questions. Please identify your news outlet before you raise your question.

CCTV:

What progress and achievements has China made in the manufacturing industry during the 13th Five-Year Plan period? How does the Ministry of Industry and Information Technology evaluate these accomplishments? Thank you.

Wang Zhijun:

The manufacturing industry is the lifeblood of China's economy and of critical significance to long-term national development. Whether it's in building a moderately prosperous society in all respects or in the new upcoming journey of building a modern socialist country, the manufacturing industry has always and will always shoulder lofty responsibilities and have major missions to perform. During the 13th Five-Year Plan period, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the industry and information technology sector has fully implemented the policies and arrangements of the CPC Central Committee and the State Council and made solid progress in building China into a manufacturer of quality products. Remarkable achievements have been made in this regard. I'd like to summarize the accomplishments in five aspects: continuously leading the way in terms of growth, solid results achieved in innovation, significant structural improvements, faster growth of enterprises, and increased levels of opening-up. To prove these five statements, I'd like to share some data with you.

First, comprehensive strength has been further enhanced. From 2016 to 2019, China's total value-added in industry increased from 24.54 trillion yuan to 31.71 trillion yuan, registering an average annual growth rate of 5.9%, much higher than the world's 2.9% during the same period. In 2019, our value-added in the manufacturing industry accounted for 28.1% of the global total, up 1.8 percentage points from 2015, with China remaining the world's largest manufacturing country for 10 consecutive years. At present, China is the only country in the world that has 41 major industrial categories, 207 medium industrial categories, and 666 industrial sub-categories in the United Nations' International Standard Industrial Classification of All Economic Activities (ISIC). For the first nine months of this year, the total added value of industry above designated size grew by 1.2% year-on-year, and that of the third quarter grew by 5.8%, showing a recovery trend quarter by quarter.

Second, innovation capacity has been significantly increased. In 2019, the investment of our industrial enterprises above designated size in research and development (R&D) reached 1.32% of GDP, up 0.42 percentage points from 2015. A manufacturing innovation network with 17 national manufacturing innovation centers as the core and over 100 supplementary provincial centers has taken initial shape. In 2020, China ranks 14th on the Global Innovation Index of World Intellectual Property list, up 15 places from 2015.

Third, industrial structure has consistently improved. The steel industry achieved its 13th Five-Year Plan target of cutting overcapacity by 150 million tons two years ahead of schedule. Demonstration and application of smart manufacturing has been accelerated. By June 2020, the penetration rate of digital tools for R&D and design as well as the numerical control rate of critical processes for enterprises in key areas of the manufacturing industry stood at 71.5% and 51.1%, respectively, up 14.8 and 3.8 percentage points from 2015. The value-added in high-tech manufacturing and equipment manufacturing accounted for 14.4% and 32.5%, respectively of the total value-added in industry above designated size, 2.6 and 0.7 percentage points up from 2015, constituting a major driving force in manufacturing development.

Fourth, high-quality enterprises have grown faster and leading enterprises have continued to gain global competitiveness. Leading companies with strong innovation capacity and international competitiveness have emerged in the fields of information and communications, rail transit, new energy vehicles, etc. Thirty-eight Chinese manufacturing companies are on this year's Fortune Global 500 list, ranking first in the world for the most companies listed from one country. Eighteen Chinese manufacturing brands entered the world's top 500 most valuable brands list this year. Additionally, 14 Chinese companies made it onto Forbes' top 100 digital companies list in 2019.

Fifth, China is opening up further. Restrictions on general manufacturing sector are being removed in an orderly manner. Caps on ownership in automobile, shipping, and aircraft sectors are being gradually lifted.High-speed railways, nuclear power, and satellite systems are gradually going overseas. In 2019, China's industrial products were exported to nearly 200 countries and regions, with exports accounting for 71% and 21% of China's total exports and global demand, respectively, occupying a key position in the global industrial chain and supply chain. By the end of 2019, China had signed industrial capacity cooperation agreements with more than 30 countries along the Belt and Road routes and over 70 overseas economic and trade cooperation zones had been established. Thank you.

Red Star News:

During the 13th Five-Year Plan period, cheaper and faster internet access — which is related to people's sense of gain — has brought about many changes to the lives of ordinary Chinese. Could you explain what achievements have been made in this regard in recent years? Thank you.

Wen Ku:

Thank you for your question. Boosting broadband speeds and lowering internet service rates are not only "gifts" for our people, they are also important steps in driving consumption, advancing entrepreneurship and employment, and promoting the transformation and upgrading of the national economy. In 2016, General Secretary Xi Jinping stressed accelerating popularization of information services to offer the general public accessible, affordable and quality services. In this way, hundreds of millions of Chinese people can have a stronger sense of gain in sharing the fruits of internet development. Since the beginning of the 13th Five-Year Plan period, we have done much work in this regard. The main achievements have been as follows:

"Accessible" refers to the availability of internet services; "affordable" indicates lower charges for such services; and "quality services" mean fast and smooth internet connections. To achieve these three goals, we improved the network performance. Currently, China's internet development is leading the world.

First, the network capability has been significantly improved. In 2015, we began speeding up broadband, cutting internet service fees, and vigorously promoting the construction of high-speed broadband, notably fiber optic and 4G. In 2019, the MIIT launched an action plan to pushing both fixed and mobile network into the gigabyte era, as well as increasing both the proportion of broadband users of 100MB or more and the penetration rate of 4G subscribers, accelerated the development of gigabyte fiber optic and 5G, and constantly improved the capacity of broadband infrastructure services. Thanks to the combined efforts of various parties during the 13th Five-Year Plan period, China has established the world's largest information and communication network. Now, our 4G base stations account for more than half of the world's total. Starting from last year, we have also built more than 690,000 5G base stations in under one year.

Second, network rates have multiplied. With technology evolving and upgrading as well as previously existing network infrastructure, our network rates have multiplied. Over the past five years, the share of fiber optic communication users has risen from 34% to 93%. In addition, the proportion of 4G subscribers grew from 7.6% to the current 81%, well above the global average. According to recent data from the Broadband Development Alliance, the average end-to-end download speed for fixed broadband and 4G in China registered a more than sevenfold increase from 2015. The end-to-end rates of our fixed network and mobile network (4G) now stand at 43MB and 29MB respectively, markedly improving the user experience.

In terms of affordability, we have done a lot of work to cut telecommunication prices.

First, people's sense of gain has been enhanced. We encouraged enterprises to introduce various preferential fee programs, cancelled domestic long-distance and roaming charges for cellphones as well as data roaming charges, adopted such measures as "rollover data services" (allowing users to carry forward unused monthly data allowance) and "increasing the internet speed but not service fees," and rolled out the "floor price" scheme to meet the demand of low-income and elderly groups. We have offered the maximum discount to households registered as living under the poverty line and assisted in targeted poverty alleviation with regard to networks. We helped reduce the production and operating costs of enterprises and boosted the development of the real economy. Over the past five years, average charges for fixed broadband and cellphone data in China have dropped by more than 95%, to only a fraction of what they were five years ago on a unit price basis. These diverse measures have benefitted over one billion cellphone and communication users every year, thereby increasing people's sense of gain.

Second, popularization and application of the internet have been advanced. Previously, cellphone users would often search for free Wi-Fi when they visited somewhere new, but they no longer do so because data fees are much cheaper now. This is the benefit that the majority of our users can feel most. The lowering of charges and fees has promoted the popularization and application of the internet. The average monthly data consumption of each user is now 10.86GB, which is 38 times higher than that of 2015. Back then, cellphone users consumed an average of just 287.9MB of data per month, typically only enough for two episodes of a comedy series. Various mobile apps are being popularized rapidly, and basic services such as e-commerce, fast mobile payments as well as innovations in the fields of internet combined with education, healthcare and elderly care are constantly being made, making the government's public services more systematic and efficient.

Furthermore, by deepening integration and application, the digital economy has achieved leapfrog development.

First, it gave birth to the development of emerging industries. The boosting of broadband speeds and lowering rates for internet services has promoted the rapid development of the internet industry. Various applications such as online shopping, online education, mobile payments, and short video sharing have fully influenced our everyday life. There are seven internet companies in total on the latest Fortune Global 500 list, four of them are from China: JD.com, Alibaba, Tencent, and Xiaomi.

Second, it injected new impetus to traditional industries. In recent years, thanks to the strong support of network infrastructure and accelerated integration of information and communication technology and the real economy, more and more industries have become "intelligent." Intelligent manufacturing, intelligent agriculture, intelligent tourism and other new integrations and applications have sped up the transformation and upgrading of traditional industries, helping more and more industries to enter the information highway. Driven by new information and communication technologies and new forms of business, China's digital economy has gained a strong growth momentum. In 2019, the economic aggregate of digital economy reached 35 trillion yuan ($5.23 trillion), accounting for 36.2% of China's GDP and aggregately contributing 67.7% to GDP.

While the urban broadband network is developing rapidly, we are focused on the construction of broadband networks in rural and remote areas. During the 13th Five-Year Plan period, in accordance with the general principle of "the central government guiding with funds, local governments coordinating and supporting, enterprises and entities promoting," the central government increased fiscal investment, and basic telecommunication enterprises actively played their "national team" role and constantly increased investment in rural construction. Over the past five years, thanks to the concerted efforts of all involved parties, more than 98% administrative villages and poor villages in impoverished three regions and three prefectures have been equipped with fiber-optic cables and 4G networks. The speed of fiber optic network in those pilot administrative villages reached 70Mbps and up. The level of information infrastructure has been rising in rural and remote areas, and internet speeds there is just as fast as it is in cities. Emerging industries including rural e-commerce, rural tourism, and intelligent agriculture sprang up, while high-quality public resources extended to rural areas and the "digital divide" between urban and rural areas was markedly narrowed. All of these achievements are praised by the public as "happiness at our fingertips."

On one hand, we will further promote the speed and quality of networks, and speed up its evolution and upgrading. On the other, we will encourage basic telecommunication enterprises to continuously cut fees and improve their quality and level of service to meet all of this year's targets as well as the new demands for the integrated development of information technology with the economy and society in general.

Economic Daily:

During the 14th Five-Year Plan period, China will build a new, dual-cycle development architecture with the domestic cycle as the mainstay and with domestic and international development reinforcing each other. What's the MIIT's plan for the next year to get a head start on the 14th Five-Year Plan? Thank you.

Wang Zhijun:

This is a very important question. Today's world is undergoing profound changes unseen in a century. This year, the unexpected COVID-19 pandemic has accelerated such changes. In the 14th Five-Year Plan period, China will enter an important period of strategic opportunity during which much can be achieved. Meanwhile, the international community is experiencing profound changes in economic, scientific and technological, cultural, security, and political areas. Next year is the first year of the 14th Five Year Plan and also the first year in which we will embark on a new journey towards the Second Centenary Goal of building China into a modern socialist country. Following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, our industrial and information technological departments will fully implement the decisions and arrangements made by the CPC Central Committee and the State Council, foster the spirit of winning, carry out pragmatic measures, stimulate innovative vitality, seek breakthroughs in reform, and fight actively for a good start to the 14th Five-Year Plan.

Next year, guided by the new development philosophy and the theme of promoting high-quality development and pursuing supply-side structural reform as main task, we will implement guidelines in "consolidating, strengthening, upgrading, and ensuring unimpeded flows," and unswervingly build China into a major country in areas of manufacturing and cyberspace.We will strengthen independent innovation, promote a high-level industrial base and modern industrial chain, set up a batch of national pilot zones for manufacturing high-quality development and advanced manufacturing clusters, and cultivate a group of excellent enterprises with global competitiveness. We will enhance quality, efficiency, and core competitiveness in industry and information technology development, and step up efforts in middle and high-end industrial chains. We will provide higher quality industrial products and better information and communication services to satisfy the people's growing needs for a better life, to build a new, dual-cycle development architecture with the domestic cycle as the mainstay and with domestic and international development reinforcing each other, and support to build China into a modern socialist country. Thank you.

Hong Kong Economic Herald:

China's digital economy has flourished in recent years, becoming a new driver for economic growth. My question is, what steps have the Ministry of Industry and Information Technology taken to boost the digital economy? Thank you.

Wang Zhijun:

I would like to invite Mr. Lu Shan to field this question.

Lu Shan:

Thank you for your question. I will give some figures to show how China's digital economy has grown during the 13th Five-Year Plan period. During the period, the Ministry of Industry and Information Technology has steadily advanced the digital economy in accordance with the plans of the CPC Central Committee and the State Council. Just as Mr. Wang and Mr. Wen has said, China's digital economy expanded from 11 trillion yuan at the beginning of the period to 35.8 trillion yuan in 2019, that is, 36.2% of China's GDP. Good results have been achieved, which can be seen through the "industrial transformation of digital technologies" and the "digital transformation of industries," as I will detail next.

First, the industrial transformation of digital technologies. For this, I'd like to use the example of internet infrastructure, which is a major area of industrialization. During the 13th Five-Year Plan period, we have built the world's biggest fiber-optic and 4G network, and are in the process of deploying the 5G network. Hardware and software are also important areas that have undergone industrialization. As you can see, during the 13th Five-Year Plan period, besides traditional laptops, desktops, and servers, we also saw a growing number of smartphone apps coming into use, including the very voice recorders that you are using at this press conference that can not only recognize speech but also connect to the internet. The software industry has made a huge contribution to the digital economy during the 13th Five-Year Plan period. In 2019, it registered another rapid annual growth of 15.4% to reach a revenue of 7.2 trillion yuan. In addition, we have seen a large number of enterprises coming forth and providing solutions related to the digital economy. We also successfully pushed for the building of eight national comprehensive experimental zones for big data, 11 national demonstration centers for the new industrialization of big data, and 13 software cities, which now serve as important bases for China's software industry and the digital economy.

Second, the digital transformation of industries. E-commerce and mobile payment platforms have boomed. Manufacturing and the industrial sector as a whole have also made good progress. For example, we have built over 70 influential industrial internet platforms, which connect to 40 million sets of industrial equipment. The number of industrial apps has exceeded 250,000. These are all typical examples of the digital transformation of industries. We have selected over 400 pilot and demonstration programs for digital transformation in the fields of industry, government service, and livelihood initiatives.

To boost the digital economy, we have also made efforts in the following two aspects. One was to create a more favorable environment for development. During the 13th Five-Year Plan period, we adopted the Big Data Industry Development Plan (2016-2020) and the Guidelines on Industrial Big Data Development. We also set up software schools with different focuses to develop new engineering disciplines and train digital economy talents. We also gave guidance to the release of 24 big data-related national standards and held exhibitions. Second, we expanded openness and international cooperation. This was achieved through an active emphasis on digital economy cooperation to strengthen strategic mutual trust and deepen pragmatic cooperation through the G20 and BRICS, as well as China-Europe, China-ASEAN, and China-Russia relationships, and other multilateral and bilateral mechanisms.

During the 14th Five-Year Plan period, the ministry will continue to accelerate high-quality development of the digital economy, promote the industrial transformation of digital technologies and the digital transformation of industries, improve the development environment, and seek higher standards of openness and cooperation.Thank you.

People.cn:

The 13th Five-Year Plan sets out precise requirements for constructing a new-generation information infrastructure. How's it going on so far? I also noticed on a message board on People.cn that some people are dissatisfied with the current development of the industry and information technology sector, and some do not understand why 5G base stations are built in residential communities. Some netizens also suggest improving relevant apps and notifications on mobile phones. What will MIIT do next? How will you improve people's satisfaction and sense of gain during the upcoming 14th Five-Year Plan period? Thank you.

Wen Ku:

Thanks for your questions. I just introduced the achievements in information and communications infrastructure made during the 13th Five-Year period. The Chinese government highly values the construction of information and communications infrastructure. Its strategies of "Broadband China" and building China's strength in cyberspace place information and communications infrastructure in an equally important position as those of water, electricity and roads.

We mobilized all sectors and the whole society to boost the construction of information and communications infrastructure. During the 13th Five-Year period, we established a principle of being moderately proactive. From copper fibers to optical fibers, from 3G to 4G, and from 4G to 5G, we have built up  world-class, high-quality and economical communication networks, granting people access to all kinds of networks, technologies and applications.

First, we followed a clear path of moderately proactive construction. Since 2015, we have taken actions to speed up broadband and lower internet rates for four consecutive years and construct role-model cities to implement the "Broadband China" strategy and develop optical networks. Last year, we launched policies to raise both fixed and mobile broadband to the gigabit level and expand the number of 4G and broadband users. We published requirements for the construction of gigabit network for a hundred of cities initiative and helped improve local policies. Since the beginning of the 13th Five-Year period, we have built up the largest communications network in the world, with 4G base stations all over the country and over 80 million users of gigabit-level optical fibers. The Internet speed doubles with the upgrade of technologies and networks, as well as with the proactive construction of the infrastructure. These figures are very impressive.

Second, we provided universal services to deal with weaknesses. Since 2015, we have launched pilot universal telecommunications services in six batches, together with the finance authority. In rural areas, we have extended optical fibers to village committees, schools and hospitals and covered every corner with the 4G network; we have also offered villagers a series of preferential policies in broadband fees. During the 13th Five-Year Plan period, the proportion of optical fibers in administrative villages increased from 70% to 98%, and people there enjoy the same network and speed as city residents.

Third, we speeded up IPv6 development. The development of the next-generation internet based on IPv6 is an important step and an inevitable trend and is of great long-term significance to improve internet capacity and services. The general offices of the CPC Central Committee and the General Office of the State Council released an action plan for IPv6 development in 2017. Since then, with various localities, government departments and related companies working together, the upgrading of the IPv6 for fixed broadband and mobile LTE networks in China has been completed. The quality of IPv6 network is now much the same as the previous IPv4 network. In 2018, the number of users who had access to IPv6 addresses was 74 million. By September this year, it was 1.457 billion. IPv6 traffic on the LTE network is also growing rapidly, accounting for 1.7% of the total last year and jumping to 13% this September.

Next, we will shift from universal coverage to high-quality development. This work can be divided into three aspects. First, we will continue building the infrastructure for raising both fixed and mobile broadband to the gigabit level and accelerate 5G development. We will make innovations in network slicing and virtual private networks for industry, improve network coverage, promote the construction and upgrading of the gigabit-level optical fiber network and improve the overall loading capacity of communications networks. Second, we will push forward pilot projects of universal telecommunications services. On the basis of achieving the goal of winning the battle against poverty, we will continue to effectively synchronize poverty eradication with rural vitalization and further deepen network coverage in rural and remote areas, letting more villagers better enjoy the fruits of IT development. Third, we will promote innovations in application. We will focus on application innovation of 5G and gigabit-level optical fibers and dig into vertical industry demands, while encouraging broader and deeper collaborative innovation between the information and communications industry and transportation, medical care, energy, education, and other industries, so as to constantly enrich application scenarios and build an ecosystem with wide applications. That's all.

Regarding the question just now, some people do not understand why 5G base stations are built in residential communities. The most important thing is that the two sides should strengthen communications. From a technical perspective, we attach great importance to the health of the people. In terms of technical indicators, when building base stations, our requirements to limit radiation are stricter than those of other foreign countries. You can see the specific indicators from relevant standards and we are cooperating with departments concernedto strictly follow these indicators.

Regarding difficulties in building base stations in communities, we have done a lot of work. Recently, we have worked with several ministries and commissions to jointly resolve those difficulties as well as the problem of "the last 100-meters" broadband access.

Regarding the issue of not allowing entry, we have seen that it is very difficult for operating companies to resolve these difficulties. In some areas, operating companies have jointly issued certain announcements. We also regret this. Operating companies should do more work in persuading residents, and explain to them properly because many people have the need for information services.

Guangming Daily:

What achievements have been made concerning China's major technical equipment in recent years? What can be called "new business cards" made in China?

Lu Shan:

Thank you for your questions, I will elaborate on the progress of China's major technical equipment during the 13th Five-Year Plan period. Major technical equipment are connected to the lifeline of the national economy and national security, and they are generally basic and strategic products. The development of major technical equipment sector reflects the development capabilities and level of a country's manufacturing industry. During the 13th Five-Year Plan period, we have made many great achievements.

First, breakthroughs have been made in a number of high-end equipment related to the national economy and people's livelihood. You may already be very familiar with the Tianwen-1 and BeiDou-3 satellite system mentioned in Mr. Wang's speech just now. Mr. Wang also mentioned the two polar scientific research ships, Xuelong and Xuelong 2, which both traveled to the Antarctic for scientific expeditions and research, and are the most advanced scientific research ships. There is also the offshore drilling platform "Blue Whale One," which is now the most advanced offshore drilling platform in the world, and successfully exploited combustible ice this year. In addition to those achievements in the arenas of sky, sea, and earth, there have also been breakthroughs in our processing capabilities. Notable examples include the five-axis mirror machine, which is an important tool for symmetrical processing, and equipment that allows for large-scale liquid-filled stretching of 15,000 tons of aerospace components, as opposed to the previous method of welding. Therefore, a large number of equipment has reached internationally advanced levels.

Second, as Mr. Wang shared with you just now, our high-speed trains now "go global," our nuclear power facilities "go global," and our satellites "go global." In addition to these, I would like to share with you an example closer to us. During the pandemic outbreak, many medical and protective materials "went global," and many medical devices have also successfully gone global. An example is the world's first two-meter-long total body PET-CT, developed by Shanghai-based United Imaging Healthcare, which has been used in scientific research institutions in the United States. In addition, some China-made CT machines, nuclear magnetic resonance machines and linear accelerators have been sold to more than 10,000 medical companies in more than 110 countries around the world. This shows that many of our "new business cards" have been recognized by people all over the world.

Behind these two aspects is the emergence of several internationally competitive leading companies. I can give you examples: rail transit equipment produced by CRRC Corporation Limited, shield tunneling machines produced by China Railway Construction Corporation and China Railway Construction Heavy Industry Corporation, cranes produced by Xuzhou Construction Machinery Group, Shanghai Zhenhua Heavy Industries Co.'s port machinery, TBEA's UHV transmission and transformation equipment, and high-efficiency and clean power generation equipment produced by the three power corporations of Harbin Electric Corporation, Dongfang Electric Corporation, and Shanghai Electric Group. The competitiveness of this equipment in the global market has been greatly improved. In addition to the rise of these suppliers of complete-machines and systems, we have witnessed that there are also a large number of enterprises involved in specialization, refinement, innovation, as well as "little giant" enterprises (medium and small-sized enterprises with great potential, leading R&D and boast good market shares) that are supporting from behind the scenes.

These are the achievements in major equipment made during the 13th Five-Year Plan period. We believe that with the high-quality development of China's manufacturing industry during the 14th Five-Year Plan period, there will be more and more "new business cards" that will benefit the people and be recognized by the world. Thank you.

CNR:

Small and medium-sized enterprises (SMEs) are the backbone for national economic and social development. In recent years, our country has introduced a series of policies and measures to support SMEs. Could you please elaborate on the efforts made by the Ministry of Industry and Information Technology (MIIT) in this regard during the 13th Five-Year Plan period? Have those supportive measures been effective? What measures will the MIIT adopt to further promote the healthy development of SMEs? Thank you.

Wang Zhijun:

Thank you for your questions. While attaching great importance to large-scale leading enterprises, such as CRRC, China Mobile and Huawei, we should pay equal attention to the large number of micro, small, and medium-sized enterprises (MSMEs). MSMEs are: a primary contributor to national economic and social development; an important source of technological innovation; and provide vital support to expanding job opportunities and improving people's livelihoods. Promoting the development of SMEs is hugely important to ensure stability on six fronts (employment, the financial sector, foreign trade, foreign investment , domestic investment, and expectations) and maintain security in six areas (job security, basic living needs, operations of market entities, food and energy, stable industrial and supply chains, and the normal functioning of primary-level governments).

The State Council has established a leading group on promotion of  the development of SMEs, and its office is located in the MIIT. During the 13th Five-Year Plan period, the MIIT has earnestly performed the duties of the office, played its full part in its coordinating role, and made solid progress in promoting the development of SMEs. In general, we have concentrated our efforts on the following three aspects during the 13th Five-Year Plan period, and tangible results have been achieved.

First, we have promoted the establishment of systems to provide legal and policy support to SMEs. The business environment is crucial to enterprises, while a complete system of relevant laws and regulations plays a very important role in creating a business environment conducive to the regular operation of enterprises. Currently, after years of effort, a system of supportive laws and regulations has taken shape at national level, which consists of "one law, one regulation and two guidelines." "One law" refers to the Law of the People's Republic of China on Promoting Small and Medium-Sized Enterprises, which was amended in 2017. The MIIT had taken part in the entire process of the law amendment and carried out an inspection on the law enforcement last year together with the Standing Committee of the National People's Congress in order to promote the implementation of the law. "One regulation" refers to a newly-released regulation on ensuring timely payments to SMEs. The regulation is very important. It is a concrete measure to implement the law on promoting SMEs and enhance the protection of the rights and interests of SMEs. In fact, many countries have similar laws and regulations. "Two guidelines" are respectively the guideline on promoting the healthy development of SMEs issued by the General Office of the CPC Central Committee and the General Office of the State Council in 2019, and the guideline on improving systems for providing support to SMEs released by 17 government departments, including the MIIT and the National Development and Reform Commission (NDRC) this year. The two guidelines focus on solving major problems SMEs are facing right now and push forward the building of a regular and long-term mechanism to promote the development of SMEs.

Second, we have promoted the specialization of SMEs. The specialization of enterprises, especially of SMEs, represents a general trend across the globe. The efforts made by China in this regard mainly include improving the systems for cultivating SMEs in a phased manner to cultivate outstanding SMEs. 27 competent authorities nationwide in provincial regions, including municipalities with independent planning authority with a high level of industrial development and the Xinjiang Production and Construction Corps, issued methods for defining cultivation of outstanding SMEs. Enterprise cultivation centers have been established in 29 provincial regions, nurturing more than 60,000 SMEs. At present, more than 20,000 enterprises have been defined as outstanding SMEs at provincial level. The MIIT released the first batch of 248 "little giant enterprises" at national level. They were selected from among the outstanding SMEs. Each of them focuses on a market niche and masters key technologies and has a strong innovative capacity and a big market share. The ministry is now organizing the cultivation of the second batch of "little giant enterprises."

Third, continue improving the public service system for small- and medium-sized enterprises (SMEs). SMEs are not as strong as large companies and require assistance and support in the public service sectors. The MIIT has cultivated and identified 657 national public service-based demonstration platforms designated for SMEs and 329 national entrepreneurship and innovation-oriented demonstration bases for small- and micro-sized enterprises. Over 3,600 provincial-level demonstration platforms and more than 2,400 provincial-level entrepreneurship and innovation demonstration bases for micro firms have been established. We support 101 real-economy development zones in developing integrated large-, medium- and small-sized enterprise accommodation carriers with distinctive features and promote more than 100,000 service sectors to offer good and convenient services forSMEs. Meanwhile, we have entrusted third party organizations to conduct development environment assessments of SMEs, to ensure an optimized growth environment.

Next, we will strengthen our efforts to actively cooperate with members of the State Council Leading Group for Promoting the Development of Small and Medium-sized Enterprises and carry out policies to ensure that SMEs are innovation-oriented and of high quality. Thank you.

Shou Xiaoli:

Now, we'll take the last question.

The Cover.cn:

In recent years, the fast growth of the industrialInternet industry has been playing an increasingly significant role in the national economy. As such, how has the industrial Internet industry developed during the 13th Five-Year Plan period? And what efforts will be made going forward? Thank you.

Wang Zhijun:

The Internet industry, and particularly the industrialInternet industry, is always a hot topic when it comes to high-quality development. I would like to invite Mr. Wen to answer your questions.

Wen Ku:

Since the publishing of the State Council's Guiding Opinions on Enhancing the "Internet + Advanced Manufacturing" and Developing Industrial Internet, significant achievements have been made in the industrialInternet community. Innovation-oriented projects concerning the industrial Internet are running smoothly, with high-quality outer networks featuring low time-delay, high reliability and wide coverage reaching over 300 cities, connecting more than 180,000 industrial enterprises, accelerating the "5G+Industrial Internet" 512 Project, with local basic telecom firms actively cooperating with industrial enterprises and over 800 projects under construction. Our efforts include: breakthroughs in the identification resolution system and the establishment of national top nodes in the five big cities of Beijing, Shanghai, Guangzhou, Wuhan and Chongqing. In addition, 75 secondary nodes are running online, more than 70 influential platforms have been built, 40 million industrial installations have been connected, safety capacity has been greatly improved, over 30 key industries have been covered by integrated-application, and five new models — smart manufacturing, network cooperation, customized, wide-range service and digital management — are actively innovated with high quality and low cost. In addition, thescale of industrial Internet reached 3 trillion yuan ($447 billion); integrated industrial connections have been strengthened, with members of the Alliance of Industrial Internet reaching 1700; cooperation between relevant technologies, standards, R&D and applications has been enhanced, and its pillar rolehas gradually emerged in the digital transformation of the manufacturing industry as well as high-quality development of the real economy.

Going forward, the MIIT will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly put into practice the decisions and plans of the CPC Central Committee and the State Council, and promote the innovation-driven development of the industrial internet. We will maintain a strategic focus and coordinate our efforts to do the following:

First, strengthen the development of the network, platform, and security systems. We will develop a high-quality network system for the industrial internet.Guided by the 512-project promotion plan for "5G + industrial Internet," we will continue to upgrade the intranet and extranet of enterprises, grow identity resolution systems, and expand the application of the systems. We will improve the industrial internet's platform by building a large data center and promote cloud services for enterprises. In addition, we will further increase the security capacity of the industrial internet.

Second, deepen integrated and innovative applications. We will build demo centers and pilot programs for the application of the industrial internet and encourage its innovative application within enterprises. We will foster and promote new models and new forms of business, such as intelligent manufacturing, internet-based coordination, custom-tailored production, service extension, and digital management, as well as fuel the digital transformation of enterprises.

Third, cement the foundation for industrial development. We will focus on the innovation-driven development of the industrial internet, improve public service platforms, and cultivate system solution providers. We will accelerate the application of new-generation information technology, including 5G, blockchain, and AI in the industrial internet, as well as grow special industries, cement industrial foundations, and modernize industrial internet chains.

Fourth, create a favorable development environment. For the next stage, we will develop policies for the innovation-driven development of the industrial internet. We will press ahead with reforms to streamline administration and delegate power, improve regulation, and upgrade services. We will also optimize the development environment, strengthen the formulation of industrial standards, and enhance industry-finance and industry-education cooperation. Finally, we will promote the sharing of the industrial internet and big data. Thank you.

Shou Xiaoli:

Thank you to Mr. Wang, his fellow speakers, and our media friends. That ends today's press conference.

.

Read in Chinese

Speakers:

Li Xiaopeng, minister of transport

Feng Zhenglin, administrator of the Civil Aviation Administration

Ma Junsheng, director general of the State Post Bureau

Liu Zhenfang, administrator of the National Railway Administration

Chairperson:

Hu Kaihong, spokesperson for the State Council Information Office

Date:

Oct. 22, 2020

Hu Kaihong:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). China's transport sector has made remarkable progress during the 13th Five-Year Plan period (2016-2020). I believe people have felt the tangible benefits from it. Today, we are delighted to be joined by Mr. Li Xiaopeng, minister of transport; Mr. Feng Zhenglin, administrator of the Civil Aviation Administration; Mr. Ma Junsheng, director general of the State Post Bureau; and Mr. Liu Zhenfang, administrator of the National Railway Administration. They will introduce the development of China's transport sector during the 13th Five-Year Plan period and answer your questions. First, let's give the floor to Mr. Li.

Li Xiaopeng:

Thank you, Mr. Hu. Ladies and gentlemen, friends from the media, good afternoon. It is a pleasure for us to take part in this press conference and brief you on the implementation of the 13th Five-Year Plan with regards to the transport sector.

General Secretary Xi Jinping pointed out that the 13th Five-Year Plan period is a golden period for developing transport infrastructure, improving service quality, and promoting transformation and development. During this time, we have been implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, and with wide support from all parts of society and people's active participation, we have been implementing new development approaches and deepening supply-side structural reforms in a united, concerted and determined manner. We anticipate that the targets outlined in the 13th Five-Year Plan will be accomplished, which will provide strong support in winning the battle against poverty and creating a moderately prosperous society in all respects.

The 13th Five-Year Plan period has witnessed the accelerated development of China's transport sector. It is estimated that China's fixed-asset investment in the sector will reach 16 trillion yuan. By the end of the 13th Five-Year Plan period, China's total railway operation length will reach 146,000 kilometers, connecting 99% of cities with a population of over 200,000. China's high-speed railway operation length has reached nearly 38,000 kilometers, ranking first in the world and covering 95% of cities with a population of 1 million and above. China's road network has reached nearly 5.1 million kilometers in length, including 155,000 kilometers of expressways. The length of China's expressways is also the highest in the world, covering 98.6% of cities and prefecture-level administrative centers with a population of over 200,000. The length of high-grade inland waterways has reached 16,100 kilometers, and there are 2,530 berths of 10,000-ton-class or above at costal ports. The length of urban rail transit has reached 7,000 kilometers, and China also has 241 civil airports, covering 92% of prefecture-level cities.

The 13th Five-Year Plan period has witnessed the transport sector's all-round victory in the battle against poverty. Estimates show that during the 13th Five-Year Plan period, over 950 billion yuan of revenue from vehicle purchase tax will have been allocated by the central government to support road construction projects in poor areas, accounting for 68% of the total. This revenue will mainly be used to support the construction of highways in impoverished areas, national and provincial trunk highways, and rural roads. The development of rural roads has quickened during the 13th Five-Year Plan period. By the end of this September, a total of 1.39 million kilometers of rural roads have been newly built or upgraded, with this figure estimated to exceed 1.4 million kilometers by the end of this year. As General Secretary Xi Jinping said, the move to improve rural roads has produced tangible benefits in recent years, bringing more people and wealth to rural areas, especially poor regions, and rallying community support for the CPC. 

The 13th Five-Year Plan period has witnessed the transport sector's firm support in steadily implementing major national strategies. The Beijing Daxing International Airport, the Hong Kong-Zhuhai-Macao Bridge, the Beijing-Zhangjiakou Intercity Railway, the Yanqing-Chongli Expressway, the 12.5-meter deep-water channel of the Yangtze River (from Nanjing to its estuary), and many other major projects have been completed and opened. This has provided firm support to the coordinated development of the Beijing-Tianjin-Hebei region; the construction of Xiong'an New Area, and the Yangtze River Economic Belt; the integration of the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area; and the ecological protection and high-quality development of the Yellow River basin, the Chengdu-Chongqing economic circle, and the Hainan Free Trade Port. An interconnected framework consisting of six corridors and six channels serving multiple countries and ports has been basically built, contributing to the high-quality development of the Belt and Road Initiative (BRI). 

The 13th Five-Year Plan period has witnessed the transport sector's efforts to improve quality, increase efficiency and reduce costs regarding transport services. High-speed rail has transported nearly 70% of passengers travelling via train, and the punctuality rate of civil aviation has increased from 67% at the end of the 12th Five-Year Plan period to 81.65% in 2019. Reforms of the toll road system have been advanced, and expressway toll booths at provincial borders have been removed, thus greatly improving the operation efficiency of roads. Greater efforts have been made to adjust the transport structure. The railway cargo volume in 2019 accounted for 9.5% of total freight transport, up from 7.8% in 2017. The waterway freight transport volume increased from 14.14% in 2017, to 16.17% in 2019. The annual growth of rail-water freight container transport volume exceeded 20%, and the annual growth of express delivery exceeded 30%. The total volume and growth rate of express deliveries in China have topped the world for five consecutive years. Logistics costs have been reduced by more than 450 billion yuan during the 13th Five-Year Plan period, and the capacity of safety management of all industries has been continuously enhanced.

The 13th Five-Year Plan period has witnessed the transport sector's robust development in new technologies and new forms of business and industry. China ranks among the highest of all countries in terms of technologies for cross-sea bridges and tunnels, deep-water channels, and high-speed railways. Phase IV of the Shanghai Yangshan automated container terminal has been completed. Fuxing bullet trains have officially begun operation. Large passenger jet C919 completed its maiden flight. The BeiDou Navigation Satellite System (BDS) has been applied in related industries. Facial recognition systems have been rolled out for high-speed railways and civil aviation. The number of daily trips for shared bikes has exceeded 45.7 million. New business models have emerged such as ride-hailing, customized shuttle buses, and internet freight transport. Terminals for smart postal and express delivery services have been widely distributed. Drones, unmanned vehicles and unmanned warehouses are being applied in the express delivery sector.

Since this year in particular, in face of the sudden COVID-19 outbreak, over 40 million workers in the transport sector worked in accordance with the Party's commands, and have been able to secure victory against the epidemic. While strictly implementing epidemic prevention and control measures, the transport sector has resumed work and production in a region-specific manner, sparing no efforts to ensure the smooth operation of logistics and supply chains. Firm support has been provided to build connections, ensure supply, and accelerate the pace in establishing a new development pattern. 

Ladies and gentlemen, friends, as China enters the 14th Five-Year Plan period next year, the transport sector will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the new development philosophy, adhere to high-quality development, and establish a new development pattern. The aim is to build China's strength in transportation with wide popularity, strong support and world-leading capacity, and take steps to fully build a modern socialist China. That completes the introduction. Thank you.

Hu Kaihong:

Thanks Mr. Li, and now let's welcome Mr. Feng to give us an introduction.

Feng Zhenglin:

Ladies and gentlemen, friends from media, just now Mr. Li gave us a systematic introduction of the overall achievements of transportation development during the 13th Five-Year Plan period. Now, I would like to make a brief introduction on the development of China's civil aviation industry.

The five-year period of the 13th Five-Year Plan has proved to be very extraordinary and important for the development of civil aviation. Under the strong leadership of the CPC Central Committee and the State Council, the scale of transportation has grown rapidly, the security situation has remained stable overall, and service quality has steadily improved. Guarantee capabilities have been markedly enhanced, and deepening reform has been further promoted. The sector's overall development conforms to the plan, and the comprehensive strength of the sector has stepped up to the front rank globally. China is making efforts to move from a major country to a global power in air traffic.

First, the transportation scale of China's civil aviation industry has grown rapidly. During the 13th Five-Year Plan period, despite the increasing downward pressure of the domestic economy, the civil aviation sector maintained a relatively fast growth rate. From 2015 to 2019, the average annual growth rate of total turnover, passenger and freight transport volume reached 11%, 10.7% and 4.6% respectively. China's scale of air transport has remained the second largest in the world for 15 consecutive years, and the gap to the number one has been narrowing year by year. This year, when the COVID-19 pandemic had a huge impact on global civil aviation, China lead the world in having hit bottom and then rebounded. In September, the total turnover, passenger and freight transport volume recovered to 76.3%, 87.5%, 96.4% respectively of the same period last year. Total turnover of domestic air transport and passenger volume recovered to 96.9% and 98% respectively compared to the same period last year.

Second, accessibility to the airline network has greatly improved. During the 13th Five-Year Plan period, the Civil Aviation Administration of China (CAAC) has taken hub construction as a driving force, actively serving national strategies, supporting local economic and social development, guiding airline companies to optimize their network layouts, and constantly improving the airline network. Up to 2019, there were 234 domestic cities served by regular services and 4,568 domestic air routes (including 111 involving Hong Kong, Macao and Taiwan); there were 167 cities in 65 foreign countries served by regular flights, and 953 international air routes. China has signed bilateral air transport agreements with 127 countries and regions. It has also signed bilateral inter-governmental air transport agreements with 96 countries involved in the Belt and Road Initiative (BRI), and maintained passenger and cargo flights at a regular basis with 54 of them.

Third, the safety level of the industry continues to lead the world. China's civil aviation industry adheres to the bottom line of safety, and has zero tolerance for potential safety risks. It has focused on the grassroots, laid the foundation and practiced the basic skills for safe operations. Through further improving our work style by concentrating on the principles of "reverence for life, rules and responsibilities", the safety governance capability of the whole industry has been greatly enhanced. By the end of September this year, the country had achieved 121 consecutive months of safe flight, total 86.69 million hours of flight time. It has also ensured air defense safety for 18 consecutive years. As for the five-year rolling value of major accident rate per million flight hours of transport aviation, China's civil aviation is 0, while the world average is 0.088. That has enabled the safety level of our civil aviation sector to remain at the forefront of the world.

Fourth, the guarantee capacity of infrastructure has been enhanced significantly. During the 13th Five-Year Plan period, in accordance with the principle of appropriate advance, China has been making efforts to improve functions of international and regional hub airports, promote capacity of large airports, enhance the support capacity of medium and small airports, and build a group of regional and general airports. China is now constructing a modern airport system featuring wide coverage, reasonable layout, advanced functions and intensive environmental protection. The system consists of three world-class airport clusters in the Beijing-Tianjin-Hebei area, Yangtze River Delta region, and Guangdong-Hong Kong-Macao Greater Bay Area; 10 international aviation hubs in Beijing, Shanghai, Guangzhou, Chengdu and Xi'an, 29 regional hub airports, together with a number of non-hub airports, which will meet the anticipated demand created by rapid growth of air transport. Beijing Daxing International Airport, which officially opened in 2019, has become a new power source for national development and new engine for the coordinated development of the Beijing-Tianjin-Hebei region, as well as the construction of the Xiong'an New Area. During the 13th Five-Year Plan period, the expansion projects of 15 large and medium hub airports including Pudong International Airport in Shanghai have been completed. The construction of Chengdu Tianfu International Airport and Jiaodong International Airport in Qingdao, rebuilding and expansion of Guiyang Longdongbao International Airport have been promoted steadily. China's first cargo-oriented airport in Ezhou of Hubei province is under construction. The country's airport network has been improved constantly, and its guarantee capability has been enhanced markedly. At present, there are 39 airports in the country with annual passenger throughput of 10 million, and 11 of them with passenger throughput of 30 million. By the end of 2020, the number of transport airports in the country is expected to reach 241, with 41 new runways, 5.88 million square meters of new terminals and 2,264 new aircraft parking spots being added. This will provide additional capacity of 400 million passengers and a total national capacity of 1.4 billion passengers. In addition, 43 new and expanded airports will be completed, bringing the number of general airports up to 313, surpassing the number of transport airports.

Fifth, the service quality of the industry has improved steadily. During the 13th Five-Year Plan period, CAAC has made great efforts to improve on-time rate of flights. The rate increased from 67% in 2015 to 81.6% in 2019, exceeding 80% for two consecutive years, and reached 87.04% in the first three quarters of this year. CAAC has carried out special initiatives to improve service quality for five straight years. We have promoted "e-ticket" flights, launched a whole-process luggage tracking system, opened the Hotline 12326 for dealing with inquiries and complaints, standardized the price of catering in airports, implemented tiered charge standards for ticket refunds, promoted services for disable passengers, increased servicemen's priority access to flights, and set up an express channel for donated body organs. Through this, we strive to provide a better travel experience and services for all passengers.

Sixth, deepening reform of the industry has been further promoted. During the 13th Five-Year Plan period, CAAC maintained a problem-oriented principle, and promoted development through reforms and deepened the industry reform. We identified 40 specific reform tasks covering 10 aspects, implemented 158 reform measures, and formed an overall framework for deepening reform featuring a "1+10+N" pattern. Breakthroughs were made in important areas and key links, such as reforms of freight rates, regulatory models, reconstruction of the aviation regulation system, and reform of shareholding system of aviation enterprises. Since the beginning of the 13th Five-Year Plan, we have carried out a total of 1,544 reform tasks, and the completion rates in 2017, 2018 and 2019 reached 93.6%, 94.5% and 91.3% respectively. At present, the reform of China's civil aviation industry is still proceeding, the administrative management system is further improving, functions of public service are further strengthening, and its administrative efficiency, regulatory levels and law-based management are also advancing at a faster pace.

Certainly, while noting the achievements made in the past five years, we also acknowledge there are still some weak links in the development of China's civil aviation, which still fall short of the requirements of the central government and the expectation of our people. At present, CAAC is formulating the 14th five-year plan for civil aviation development and the guidelines for the reform of the industry. The sector will resolutely adhere to the bottom line of security, and further promote intelligent civil aviation as the main focus of future development. We will comprehensively enhance the ability of our resource guarantee, create a longer safety period, vigorously improve service quality, and better meet people's diverse air travel demands and development needs of modern aviation logistics, so as to contribute to nurturing a new development pattern that takes the domestic market as the mainstay while letting domestic and foreign markets boost each other. Thank you.

Hu Kaihong:

Thank you, Mr. Feng. Now please welcome Mr. Ma Junsheng, head of the State Post Bureau.

Ma Junsheng:

Ladies and gentlemen, friends from the press, good afternoon. Just now Minister Li gave a general introduction to the transport achievements during the 13th Five-Year Plan period. Now I'd like to add a few points about the development of the postal sector in the past five years, by using a set of data.

Over the past five years, the revenue of the entire postal industry has grown from $403.9 billion in 2015 to $1.1 trillion, a five-year net increase of $700 billion, with an annual growth rate of 22 percent.

Secondly, over the past five years, the industry has created more than one million new jobs, with an annual growth of 200,000.

Third, the annual business volume of express deliveries increased from 20.7 billion in 2015 to over 80 billion this year, quadrupling in five years. Our country's parcel delivery volume exceeds that of the United States, Japan, Europe and other developed economies combined, and our contribution to the world CEP market exceeds 50 percent.

Fourth, the annual number of postal uses grew from 70 billion in 2015 to 150 billion this year.

Fifth, the postal service network has achieved full coverage above the administrative village level, with express delivery outlets reaching 98 percent of the towns and townships. The self-operated international express delivery network now serves more than 60 countries and regions. The industry-wide number of cargo planes for domestic express delivery increased from 71 to 130. More than 400,000 smart boxes for express delivery have come into service.

Sixth, the overall comprehensive strength of enterprises in the sector has increased significantly. China Post Group Corporation ranks 90th among the world's Fortune 500 companies. Seven express delivery companies have been listed through restructuring, among which three branded ones exceeded 100 billion yuan in their business revenue this year. That's all. Thank you.

Hu Kaihong:

Thank you, Mr. Ma. Now please welcome Mr. Liu Zhenfang, head of the National Railway Administration.

Liu Zhenfang:

Ladies and gentlemen, friends from the press, good afternoon. Just now Minister Li introduced the overall development of transport during the 13th Five-Year Plan period. Now I'd like to add several points about the railway sector.

During the 13th Five-Year Plan period, following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and under the strong leadership of the CPC Central Committee and the State Council, the railway sector has taken a people-centered approach, adhered to the new development philosophy, advanced railway supply-side structural reform, and strived to promote the high-quality development of the sector. We have achieved the relevant goals set in the 13th Five-Year Plan, and played a leading role in building China into a strong country of transportation, serving the national strategy and promoting socio-economic development.

First, railway network construction has been accelerated. The main framework of the "four vertical and four horizontal" high-speed railways has been completed. The construction of the main channels of the "eight vertical and eight horizontal" high-speed railways, as well as normal-speed railways, have been sped up. Rapid advances have been made in building intercity railways in key regions. A large number of new lines, such as the Beijing-Zhangjiakou Smart High-speed Railway and the Haolebaoji-Ji'an Railway, a heavy-load line for transporting coal from the north to the south, were put into operation. The layout of the national rail network was continuously optimized and the network quality was remarkably increased. The rail network in the central and western regions was constantly improved, with hubs and supporting facilities greatly enhanced. By the end of 2019, the length of in-service railways nationwide had reached 139,000 kilometers, including 35,000 kilometers of high-speed rail lines. A well-balanced, wide-ranging, well-organized, safe and efficient rail network will basically take shape by the end of the 13th Five-Year Plan period.

Second, the quality of transportation has improved significantly. The railway industry has focused on meeting the people's growing demand for railway transport, vigorously implementing structural reform of the railway supply side, and continuously improving transport supply capacity, service quality and safety. From 2015 to 2019, the number of passengers and the volume of cargo transported by rail grew at an average annual rate of 9.6% and 6.9% respectively. The greatly improved transport capacity made it more convenient for passengers to travel and strongly ensured the transport of key materials such as energy and resources. With passenger tickets and cargo bills going digital, railway transport services were improved significantly. The ability to provide emergency support has been significantly enhanced, and transport safety has remained stable, and now our high-speed railways lead the world in terms of safety. 

Third, the level of equipment has been comprehensively upgraded. A high-speed rail construction and equipment manufacturing technology system with independent intellectual property rights has been formed. The Fuxing, China's standard high-speed trainset, has achieved a commercial speed of 350 kilometers per hour, and a series of models has basically taken shape. For the first time in the world, intelligent trainsets have achieved automatic driving at a speed of 350 km/h. The levels of high-power locomotives, heavy-haul vehicles, communication signals, traction power supply, equipment for maintenance, repairing and testing as well as construction machinery and apparatus were greatly elevated. Constant innovations were made to the application of new intelligent technologies.

Fourth, railway reform is gradually deepening. The industry regulatory system is gradually improving, and the transformation of government functions and the streamlining of administration and decentralization of power have achieved obvious result. The reform of the railway investment and financing system has been deepening, and the proportion of investment in railways by local governments and social capital has increased significantly. State-owned railway enterprises have established modern enterprise systems. Companies like Beijing-Shanghai High Speed Railway Co., Ltd. have been listed. The law-based and market-oriented reform of railway transportation has been further advanced, further improving the business environment.

Fifth, international cooperation has been fruitful. In serving the construction of the Belt and Road, China has achieved positive results in the internationalization of railway standards and made new breakthroughs in railway connectivity. The landmark projects of the China-Lao Railway and the Jakarta-Bandung High-Speed Railway have made steady progress. Projects including the Addis Ababa-Djibouti Railway and the Mombasa-Nairobi Railway were completed and came into service. Railway technology and equipment have been exported to more than 100 countries and regions. The rapid development of China-Europe class trains, with a total of more than 30,000 trains by the end of September 2020, has become an important achievement and highlight of the "Belt and Road" construction. Especially this year, faced with unexpected COVID-19 pandemic, the China-Europe freight train has played an important role in promoting the resumption of work and production as well as stabilizing the international supply and industrial chain. That's all. Thank you.

Hu Kaihong:

Thank you, Mr. Liu. Now the floor is open to questions.

CCTV: 

Mr. Li, this year is the final year of the 13th Five-Year Plan. We have noticed that many hard targets have been set in the transportation sector. How have those targets been met in the past five years? From the checking lists, can you report the various outcomes? Thank you.

Li Xiaopeng:

Thank you for asking. Regarding the checking lists, we have two. One list is the 13th Five-Year Plan for Economic and Social Development, which refers to the transport section in the national plan and is composed of three hard targets. The second list is the 13th Five-Year Plan for the development of the modern comprehensive transportation system. This list has 24 indicators, of which four are mandatory and 20 are anticipated. On the whole, we have been able to accomplish the goals and tasks of the 13th Five-Year Plan. Overall, the mandatory targets of the national plan have been exceeded, the obliged transportation section targets have been fulfilled, and the anticipated goals have also been mostly fulfilled. Next, I will check the lists in detail. I'll discuss it in three parts:

In the first part, all hard targets set in the country's 13th Five-Year Plan will be exceeded. Among these three targets, the first is the mileage of newly built or upgraded expressways. The target set was 30,000 kilometers, but we have surpassed the target, building 31,000 kilometers. The second target was to increase the operating mileage of urban rail transit by about 3,000 kilometers. Over 3,000 kilometers have since been completed, also exceeding the target. The third target was to build or renovate 1 million kilometers of rural roads. By the end of September, however, 1.388 million kilometers of roads had been completed, and we're expected to exceed 1.4 million kilometers by the end of this year.

In the second part, four mandatory targets in the comprehensive transport development plan have been successfully completed. The first was to ensure administrative villages have access to tarmac and cement roads. That target was to provide 99% of administrative villages with such roads, and the figure now stands at 99.61%. Among these, 100% of administrative villages with the necessary conditions now have tarmac and cement roads. The second target was to ensure shuttle bus access to administrative villages. While the target was to provide 99% of villages with a bus service, now 99.38% of all villages have bus access. Among them, 100% of villages with the necessary conditions have bus access. The third indicator was that bus stations would be available every 500 meters in cities with a population of over one million. That target is at 100% and has been met. The fourth indicator was the reduction rate of the number of deaths caused by traffic accidents at a serious level or above. That target was 20% but we've managed to reduce the number of deaths by over 20%. Therefore, all these four mandatory targets have been fulfilled.

Third, all anticipated indicators have been mostly completed. They involve highway and waterways. The highway mileage target was 5 million kilometers, while 5.1 million kilometers have been completed. The mileage for expressways was set at 150,000 kilometers, with 155,000 kilometers being completed. The high-grade inland waterway mileage was set at 17,100 kilometers but 16,100 kilometers have been completed, for a completion rate of over 94%. Meanwhile, the target for building 2,527 coastal port berths of a 10,000-ton level or above has been exceeded, with 2,530 being completed. The operating mileage for urban rail transit was set at 6,000 kilometers, which reached 7,000 kilometers. The standardization rate for road freight models of 80% was also exceeded. The annual growth rate for container railway-waterway intermodal transportation was set at 10%, with an actual completion rate of 20% or above. Finally, the target for the digitization rate of basic traffic elements was 100%, which was met; the target for electronic toll collection (ETC) utilization rate for road buses was 50%, but actual completion was 70%, and the target to reduce carbon dioxide emissions from transportation by 7% was exceeded for total reductions of 7.5%.

That's the indicators presented. Now I would like to invite Mr. Feng, Mr. Ma, and Mr. Liu to introduce the achievement of targets in civil aviation, postal service, and railways, respectively.

Feng Zhenglin:

Thank you, Mr. Li. The 13th Five-Year Plan of civil aviation covers 14 indicators involving industry scale, development quality, guarantee capability, and green development. From the perspective of lists checking, these are likely to be completed. I will focus on three indicators that directly relate to people's lives.

First, the aviation safety indicators. Safety is the lifeline of civil aviation and we always place people's safety as a top priority in civil aviation work. We always adhere to a "zero tolerance" policy for any hidden dangers, focusing on safety work by improving "junior staff, groundwork, and basic skills," as well as intensifying efforts to improve our conduct. We vigorously promote a civil aviation regulatory model, shifting from a staff-things orientation to an organization-system approach, keeping an eye on system changes, and firmly sticking to civil aviation security. In the past five years, even as the industry's scale has been growing rapidly, the overall aviation safety situation has remained stable. The five-year rolling average of major accident rates per million flight hours is zero, which is higher than the safety target outlined in the 13th Five-Year Plan and also better than the world's average.

Second, the flight on-time rate indicators. Over the past five years, we have adhered to the principle of controlling total flight volume, strengthening our systems, and constantly strengthening control measures all the while. During the 13th Five-Year Plan period, the on-time flight rate increased by 14.65% compared to the end of the 12th Five-Year Plan period. Additionally, the national average on-time flight rate reached 80.13% in 2018 and 81.65% in 2019. In the first three quarters of 2020, due to the impact of the epidemic, the number of flights was relatively small, and the on-time flight rate reached 87%, fulfilling the 80% development target set in the plan two years ahead of schedule.

Third, the target for air passenger turnover ratio. The 13th Five-Year Plan is a crucial stage for comprehensively strengthening the building of a powerful civil aviation country. We adhere to a guideline of making progress while maintaining stability for our work. We also adhere to supply-side structural reform and promote the high-quality development of civil aviation. The comparative advantage of civil aviation in the comprehensive transportation system has been further enhanced. In 2019, the civil aviation passenger turnover within the nation's comprehensive transportation system increased from 24.2% at the end of the 12th Five-Year Plan period to 33.1% today. This target has therefore been met two years in advance.

However, as for the overall planning goal, we should continue to work on one thing: improving the development of general aviation. According to the original development goal, 500 general airports and 5,000 general aircraft should have been built as well as 2 million flight hours clocked. At present, registered general airports number 313. If we add the number of airports currently undergoing verification and certification, the target could be met. However, only 2,777 aircraft have been built so far, which does not include UAVs (unmanned aerial vehicles). If UAVs were to be included, it would exceed the target. Again, fewer than 2 million flight hours have been achieved but if those of UAVs were counted under general aviation, this figure would have been exceeded. At present, the figure stands at around 700,000 hours.

That's all. Thank you.

Ma Junsheng:

Just now, I introduced some indicators of the developments of our industry during the 13th Five-Year Plan period. We have achieved the goals and tasks we set. One of the tasks assigned by the central government to our postal industry is to cover all administrative villages with direct postal services during the 13th Five-Year Plan period. Before this period, about 36,000 administrative villages, 6.6 percent of all villages, did not have direct access to postal services, most of which are located in the western region, areas with ethnic minority populations, old revolutionary base areas, and border areas. Most of these villages are poor with inconvenient transportation and scattered postal service outlets. To achieve the goal of building a moderately prosperous society in all respects, we have earnestly implemented the original mission of "People's Post serves the People" and for five consecutive years given the priority to the task ofcovering all administrative villages with direct postal services, as part of our agenda to serve the people. We increased investment, optimized the network, and overcame all difficulties. In August of 2019, we finally achieved the goal one year ahead of schedule. So far, villagers in 556,000 administrative villages across the country can receive postal services without leaving their village.

At the same time, we continue to optimize the policy environment to promote the platform and intelligent development of express delivery terminals. The layout of public service stations and smart parcel delivery lockers is also more complete. Nearly 110,000 public express delivery service stations have been built across the country, and 93 percent of the outlets are standardized. These service facilities have played a significant role in this year's epidemic prevention and control. With these facilities, effective package delivery services can be provided. Postmen and couriers can collect packages that senders have dropped off at designated outlets, which effectively reduces their face-to-face contact with consumers and minimizes the risk of spreading the epidemic via the delivery process. That's all I want to add. Thank you.

Liu Zhenfang:

Regarding railways, we have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council and fully implemented the 13th Five-Year Plan for Railway Development to promote high-quality development of railways. The Plan puts forward 10 main indicators in three aspects, which will be achieved by the end of 2020.

First, in terms of road network construction, the total commercial mileage of the nation's railwayshas reached 146,000 km, an increase of 25,000 kilometers from the end of 2015; among them, high-speed railways made up 38,000 kilometers, an increase of 19,000 kilometers from the end of 2015. The commercial mileage of railways in the central and western regions cover a distance of 90,000 kilometers. The proportion of double-line railways reached 60 percent, and the proportion of electric railways reached 73 percent. The railway network coverage in cities with populations over 200,000 has reached 99%. The coverage of high-speed rail networks in large cities with populations over one million has reached 95 percent.

Secondly, in terms of passenger and freight transport, in 2019, 3.66 billion people traveled by rail, an increase of 44.4percent from the last year of the 12th Five-Year Plan; the volume of passenger transportation reached 1.47 trillion person-kilometers, an increase of 22.5percent; China railways carried 4.389 billion tons of freight, an increase of 30.7 percent while generating 3.02 trillion cargo ton-kilometers, an increase of 26.9 percent.

Transportation capacity has been significantly improved. Electrical Multiple Units (EMUs) have become the main force in passenger transport. The passenger trips delivered by China Railways High-speed (CRH) trains account for approximately 70 percent of all railway passenger trips. The ratio of online ticket sales exceeds 80 percent.

Third, in terms of green development, we have helped win the "fight to keep our skies blue" and further promoted the adjustment of the transportation structure. The railway freight market share has increased from 7.8 percent in 2017 to 9.5 percent in 2019, and the comparative advantages of railways have been given full play. The energy consumption of railway transport has been further reduced. In 2019, the total energy consumption per unit of railway transport was 3.94 tons of standard coal per million conversion ton-kilometers, down by 16.3 percent from 2015. Great efforts have been made in the comprehensive management of the environment along the railway. The green corridors and the most beautiful CRH trains are becoming well known. The green development of the railway has made significant progress. Thank you.

Li Xiaopeng:

Thank you for the additional information. In general, the briefings showed that we can complete the goals and tasks set in the 13th Five-Year Plan. Here, I would like to thank the whole country and news outlets for their attention and support in the transportation sector. Although we can meet the goals of the 13th Five-Year Plan, there is still work to do if we want to meet the requirements of the CPC Central Committee, people's new expectations for a better life, and the requirements of economic and social development. In the upcoming 14th Five-Year Plan, we will continue to build China's transportation industry to provide good service to our people, ensure reliable operations and maintain our international competitiveness. Thank you.

hb.dzwww.com:

During the 13th Five-Year Plan period, new kinds of transport, such as online car-hailing and bike-sharing, have boomed. Can you tell us what other measures the Ministry of Transport will roll out to promote new kinds and models of transport? Thank you.

Li Xiaopeng:

Thank you for your question. Are you also from new media? It is a new form of industry. The transportation industry is an old-established form of business, but the combination of tradition with new technologies and industries, such as information technology and modern financial services, has spawned many developments in the transportation industry, which have played an important role in serving the people and improving the quality of life. The Ministry of Transport has always attached great importance to these new kinds of business. Taking an inclusive yet cautious approach, we support and encourage the development of new kinds of transportation based on the principles of putting people at the center, fostering innovation, seeking benefit and avoiding harm, and regulating the development.

We have established an inter-ministerial joint meeting system for the coordinated supervision of new kinds of transportation and issued many policy documents for the standardized management of new kinds of businesses to promote their healthy and standardized development. So far, more than 190 online car-hailing platforms have obtained operating licenses, and more than 2.5 million online car-hailing driver licenses and about 1.04 million vehicle transportation certificates have been issued across the country. The online car-hailing services receive about 21 million orders daily. A total of 19.45 million shared bicycles have been put into operation in more than 360 cities across the country. 

As I mentioned just now, the average daily shared bicycle rentals exceed 45.7 million, and the industry's regulation has gradually improved. Regarding vehicle sharing, more than 200,000 vehicles have been put onto the streets of over 180 Chinese cities. Internet-based freight service, another new kind of business, has integrated more than 1.72 million freight vehicles, accounting for 15.9 percent of the total number of trucks in operation. The concentration of the freight market has also increased.

Next, we will continue to encourage and support the development of new kinds of transportation. The first objective is to promote innovation. The second is to promote the integrated development of new and traditional business. The third is to optimize the business environment. The fourth is to ensure safety. Working together with other departments, we will enable these new kinds of transportation to deliver higher quality and better serve the people. Thank you.

Bloomberg News:

Europe's aviation regulator said he's satisfied that changes that Boeing has made to the 737 Max have made the plane safe to fly there this year. Does China agree with this position? And what is the timeline and procedure for the 737 Max to be allowed to fly in China? It's a question for Director Feng.

Feng Zhenglin:

Thank you for your questions. The CAAC has paid great attention to the 737 Max 8 investigation because more jets being grounded in China than in any other country. Of course, regarding the 737 Max 8's return to service, we have maintained technological cooperation and communication with the U.S. Federal Aviation Administration (FAA), the Boeing Company, and the European Union aviation regulator. Boeing's CEO has also talked with me twice about this issue. China was the first to halt commercial operations of all Boeing 737 Max 8 airplanes worldwide following the two fatal crashes. The decision was made based on a zero-tolerance attitude toward safety risks and a high degree of professionalism in safeguarding our aviation security, which demonstrated our strong sense of responsibility toward protecting human life and safety. We have also adopted the same attitude regarding the resumption of flights and the safety of the revised design of the 737 Max 8 must be guaranteed before the airplane resumes operation. When exchanging views with the FAA and Boeing, we proposed three principles for Boeing's flight resumption in China, that is: changes to the airplane's design must receive airworthiness approval; the pilots must be trained fully and effectively, and; results of the investigations into the two crashes must be clear and measures for improvement must be comprehensive. Considering these three principles, we have not set a timetable for resuming 737 Max 8 flights in China. However, we are willing to see the jets return to service as long as they meet these requirements. In the meantime, we continue to enforce a strict evaluation of the airworthiness of these airplanes to ensure flight safety. Thank you.

Thecover.cn:

Just now, Mr. Feng said that the service quality of the civil aviation sector has improved significantly nationwide during the 13th Five-Year Plan period, with various public service measures achieving effective results. Could you please give us more details regarding these results? Thank you.

Feng Zhenglin:

Thank you for your question. In the 13th Five-Year Plan period, China's civil aviation sector has considered the provision of comprehensive sincere service a fundamental requirement to improve service quality, give people a stronger sense of security and gain regarding air travel, and maintain efforts to ensure airport on-time performance and service quality. In particular, we have tried to pursue service quality development by increasing the flight punctuality rate. In the 13th Five-Year Plan period, we were committed to seeking improvement in 12 areas of service, and the relevant work is well underway.

First, we have pledged that flight punctuality would reach 80% in the 13th Five-Year Plan period. As I just said, based on an assessment of the current situation, this goal can be achieved thanks to a series of improvement measures that we have adopted. In particular, we have conducted comprehensive management regarding operational bodies, especially airline companies, airports, and air traffic control sectors, so that an effective flight punctuality system has taken shape. At present, the weather accounts for 60% of all factors that affect flight punctuality.

Second, paperless ticketing has been popularized and is now used at 229 airports and across major airline companies nationwide. Passengers at airports, especially Beijing Daxing International Airport and Beijing Capital International Airport, are likely to have noticed the notably shortened waiting times.

Third, luggage services have been improved. The number of bags that are damaged or sent to the wrong destination has decreased significantly. A network of radio frequency identification devices (RFID) is taking shape, enabling whole-journey luggage tracking on some specified air routes. The technology allows air passengers to follow information about their luggage in real-time after baggage check-in, avoiding the possibility of passengers boarding without their luggage in the cargo hold.

Fourth, transfer services are more convenient. At present, eight airline companies and 29 airports are actively conducting a pilot project on luggage check-through services for domestic cross-airline transfer passengers. This transfer service has seen effective results thanks to an active, responsive system. Moreover, airline companies are actively exploring air-rail intermodality, enabling one-stop ticketing, one-pass customs clearance, and seamless passenger transfers at some airports with railway links. 

Fifth, flight information services have been more standardized. Airline companies and ticket agencies are now implementing strict measures to provide information to ticket buyers, establishing dynamic information systems and processes that offer real-time flight information via multiple means. This significantly improves information service quality during ticketing and check-in procedures.

Sixth, we have adopted tiered pricing for ticket changes and refunds. Currently, 41 domestic airline companies have implemented tiered pricing to ensure more reasonable charges and more efficient services for ticket changes and refunds.

Seventh, catering services at airports have adopted a principle of "same price and quality citywide." We have promoted airports to charge consumers the same price for the same catering services within the same city by implementing various means such as catering industry entry standards, alignment with benchmark prices, and certification of shops with price parity. Meanwhile, we have made efforts to offer greater product variety for in-flight catering services to better meet the need of air passengers. Some airline companies also provide offline meal ordering services for in-flight meals.

Eighth, in-flight Wi-Fi construction has been accelerated. So far, 19 airline companies provide in-flight Wi-Fi on 506 of their aircraft, covering 8.55 million passengers. This service allows air passengers to access the internet on their trips, communicate via WeChat, and use other online amenities.

Ninth, the average passenger self-check-in rate has exceeded 70%. At present, passengers' average self-check-in rate stands at 72% across 37 mega airports in China with an annual passenger throughput of over 10 million. Customer satisfaction remains high through self-check-in machines, online, and via smartphone apps.

Tenth, trial implementation of a new security check has been made gradually. Currently, credit-based security checks have been piloted at 15 mega airports, each witnessing at least 10 million passenger trips each year. At some international airports, including Beijing Capital International Airport and Beijing Daxing International Airport, passengers have experienced one-stop security checks, with customs inspection and civil aviation security checks achieving the same check results.

Eleventh, we have accelerated the application of information technology in aviation logistics. In 2019, nearly 1.8 million electronic air waybills were used, which quickened the pace in promoting the modernization of aviation logistics.

Twelfth, the civil aviation service and complaints hotline 12326 has been put into use. By doing so, we have broadened the channels to handle passenger complaints, with domestic airline companies providing an effective response rate of 100%. 

Meanwhile, we have actively promoted various special services in the 13th Five-Year Plan period. As I mentioned, we issued the Management Measures for Air Transport of Persons with Disabilities, offered exclusive access to military personnel in accordance with the law, established mother-and-baby facilities, and opened a civil aviation "green passage" for the transfer of donated organs which has so far been used 5,149 times.

Generally speaking, all public service installations we pledged have been implemented. Thank you.

CRNTT:

High-speed rail has become a calling card for China, with achievements being witnessed by all. What progress has been made in improving rail transport service to meet the people's expectations for a better life? Thank you.

Liu Zhenfang:

Thank you for your question. During the 13th Five-Year Plan period, we have adhered to a people-centered approach and vigorously implemented supply-side structural reform. Continuous improvement has been made in the supply, quality and safety of rail transport.

First, the quality has significantly increased, enabling people to have a much better travel experience. China has built the world's most advanced high-speed rail network. As you said, it has become a calling card for China, winning universal praise for advanced technology, safety, punctuality, efficiency and sustainability. CRH (China Railways High-speed) is now the most popular mode of transportation among Chinese people.

We have improved the overall quality of rail services and upgraded the supply of passenger transport products. A product series has been created covering passenger trains with boast various classes and operating at different speeds and schedules. We have stepped up efforts to make rail passenger transport more market-based, convenient and informationized. E-ticket, facial recognition, railway applications and other innovative services have been rolled out. Other services including the combination of air transportation with high-speed rail, mutual recognition of security checks and online food orders have become more convenient and efficient. The environment of train stations and coaches as well as the quality of services have noticeably improved. All the efforts are aimed at fulfilling passengers' needs for diverse, personalized and high-quality transport products and services.

Second, we have increased the supply capacity regarding railway freight transport and stepped up market-oriented reforms in the sector. A group of trunk railways including the Haolebaoji-Ji'an, Lanzhou-Chongqing and Quzhou-Ningde lines were opened. The operation of newly built high-speed railways has unleashed the capacity of existing lines and further increased the supply of freight transport services. We have boosted the development of multimodal transport and the combination of water and railway transportation. We have made efforts to promote the construction of industrial sidings and logistic bases to remove barriers in both "the first and the last miles". In response to market demand, we have optimized the supply of railway products, improved a market-based pricing system and promoted development of heavy haul transportation and express trains. Container transport, cold-chain transport and high-speed rail express have become current highlights in the growth of railway freight transportation. We have also promoted the application of electronic receipts and improved the quality of services in this sector.

Third, railway transport has played an active role in enhancing public welfare and combating poverty. We accelerated railway development in poverty-stricken areas of western China. The railway length in central and western China has continuously increased, now accounting for 62% of the country's total. We optimized the allocation of railway capacity. The non-commercial "slow-train" and special train for agricultural produce services were launched to ensure passenger travel and cargo transport in poverty-stricken areas. Express lines were made available for supplies needed in disaster relief, public health emergency responses and national defense transport.

Fourth, the foundation for safety was cemented, enabling the rail network to maintain safe and stable operation. We uphold the principle that people's interests come first and life matters most, so that we have sought to promote safe development, and attached great importance to the safe operation of high-speed and express passenger trains. We strengthened risk prevention and the screening of potential safety hazards as well as increased the capacity of equipment technology to guarantee railway safety. We have been urging enterprises to fulfill their primary responsibilities in ensuring safe production and improving the regulatory system for railway safety. We have taken systematic, comprehensive and concerted measures to improve the environment along railway lines. As a result, the network has been able to maintain safe and stable operations. Thank you.

Red Star News:

It is stated in the 13th Five-Year Plan for postal service development that China will have developed a modern postal service industry that conforms to a moderately prosperous society by 2020. What progress has been made so far? What role has it played in meeting the Chinese people's demand for postal services on their way to a better life? Thank you. 

Ma Junsheng:

Thank you for asking. My answer is that we have achieved positive progress. While making the 13th Five-Year Plan for postal service development, we set out the goal of developing a modern postal service industry that conforms to a moderately prosperous society according to China's national conditions and developmental trends in the world's postal industry. Focusing on this goal, we outlined 18 indicators across five aspects, namely measuring scale of development, service ability, service level, innovation capacity, and competitive strength. So far, all of these goals have been reached, with the exception of the international business ratio, which fell short of our expectation due to the impact of the pandemic this year.

The implementation of the plan has played a great role in meeting the Chinese people's demands for postal services. The past five years have seen the strongest sense of gain among the Chinese people; the fastest growth in industry strength; the most solid links among primary, secondary, and tertiary industries; and the biggest international influence exerted. The fundamental strategic role of the industry has also been significantly enhanced. The postal service industry has given more prominent support to the primary, secondary, and tertiary industries with better services, improved timeliness, wider access, and more comprehensive coverage of businesses. In particular, our efficient and cost-effective postal and express services have helped with the prosperous development of e-commerce. Online retail sales, thanks to the support of the postal service, exceeded 8 trillion yuan last year. The figure is expected to exceed 10 trillion yuan this year. By the end of September, the proportion of total retail sales in consumer goods in China had reached 24.3%, demonstrating the significant role of the postal service. Moreover, our services for modern agriculture and advanced manufacturing are moving toward specialization and extending to high-end industries. Meanwhile, two-way circulation channels have been further opened up in the countryside. Last year, we helped to send industrial products to the countryside and agricultural products to cities, with their total output value surpassing 870 billion yuan. Under the leadership of the Ministry of Transport, the level of coordination and integration between postal and transport services has been significantly improved.

Over the past five years, our infrastructure network has been expanded in an all-round way. We have mainly promoted the construction of express logistics parks and air express freight hubs. A total of 313 new hubs equipped with automatic sorting equipment have been built nationwide, raising the overall level of automation. We have also made great efforts to bring express delivery services to towns and villages. Now, express delivery outlets in rural areas cover more than 30,000 towns. We have also stepped up efforts to develop urban and rural terminal service outlets, and their density has been greatly increased. At present, there are 320,000 postal express outlets in China, equating to one service outlet per every 4,500 people (as calculated for a population of 1.4 billion). Such a high density is second to none in the world.

Over the past five years, we have also made remarkable achievements in innovative development. We are accelerating the application of artificial intelligence, big data, the Internet of Things, and blockchain technology. Our intelligent customer and warehouse service as well as the Beidou navigation technology has been put into use, and we have made breakthroughs in the application of unmanned aerial vehicles, unmanned ground vehicles, and unmanned warehouses, as well as in intelligent security inspection technology. Technological iteration and upgrading has indeed greatly improved our operational efficiency.

Over the past five years, we have greatly accelerated the pace toward an environmentally friendly postal service industry. We have made full efforts in promoting projects "9571" and "9792." In the past, postal express waybills were handwritten; now, there is no such need, as almost 99% of waybills are electronic. This move makes the postal service more environmentally friendly and efficient. In the past, it took us approximately 10 minutes to write a waybill for a single express parcel, but now it takes less than two minutes to process an express parcel. The industry now saves significant resources given that 80 billion express parcels are processed per year.

Over the past five years, the industry's security services have remained stable overall. During the epidemic prevention and control this year, delivery persons fulfilled their duty in the face of the epidemic, guaranteeing normal delivery of epidemic prevention and control supplies and basic daily necessities. In addition, the per capita volume of express parcels in China stood at 45 in 2019 and is expected to reach nearly 60 this year, which is about twice the global average.

Over the past five years, delivery efficiency has also increased steadily. More than two-thirds of China's provincial-level regions have realized same-day delivery of Party newspapers and periodicals to areas at and above the county level. Government services for the convenience of the people such as "Internet Plus Postal Service" have been widely promoted throughout the country. More express delivery businesses have offered products to fulfill their promises. Precise delivery services such as scheduled delivery have also developed rapidly. Multiple delivery means, including home delivery, postbox delivery, and delivery to an outlet have been widely put into application. Customer satisfaction with universal post and express delivery services has also increased steadily.

China News Service:

The newly-built Beijing Daxing International Airport epitomizes the rapid development of medium- and large-sized airports across the country during the 13th Five-Year Plan. Could you please give us an overall view of airport construction during this period? Thank you.

Feng Zhenglin:

Thank you for your question. The construction of airports for civil aviation, which is conducive to the fulfillment of the 13th Five-Year Plan, can be defined by their large-scale, fast construction, large investment and efficient operations. By the end of the 13th Five-Year Plan period, the number of airports across the country is expected to reach 241, with 43 new and relocated or refurbished airports. These include an additional 41 runways, 5.88 million square meters of terminal space and 2,264 more aircraft parking spaces to expand airport capacity to 1.4 billion visits. The number of airports in the country with a capacity above 10 million increased from 26 at the end of the 12th Five-Year Plan to 39 by 2019. In addition, 11 of these have reached a capacity above 30 million. This has substantially improved the shortfalls and limited capacity of key airports. 

Second, construction has progressed quickly. The last five years has seen construction of Beijing Daxing International Airport and refurbishment and expansion of 15 medium- and large-sized airports, including in Shanghai's Pudong New Area, Chongqing municipality, Wuhan and Zhengzhou. You will be aware that Beijing Daxing International Airport, the huge top-level international aviation hub, was completed in four and a half years during the 13th Five-Year Plan period. Having been in operation for less than one year by Sept. 22, the airport has seen throughput of more than 10 million passengers, indicating a good momentum for quality development among large-sized international airports in spite of the pandemic's impact. During the same period, nine airports, including those in Urumqi, capital of Xinjiang Uygur autonomous region; Shenzhen, Guangdong province; Xi'an, capital of Shaanxi province; and Guangzhou, capital of Guangdong province, are being expanded. Renovations to Chengdu Tianfu International Airport, the new Qingdao airport and Guiyang Airport are also all well underway. Construction has started on Ezhou Airport in Hubei province, China's first air freight transport center, with modern engineering management. From my own visits, I can assure you of their utmost advanced information technology and engineering application which guarantee the speed and quality of construction. In addition, the expansion or relocation of a number of small or non-key airports has been completed. The year 2017 marked the most fruitful year in China's civil aviation history with 14 additional runways and 11 new air carrier airports under construction or opening to operations. The approval of the third phase of Guangzhou Baiyun International Airport took only four months before construction started recently.

Third, the investment completion efficiency is high. Fixed investment is projected to reach 460 billion yuan by the end of the 13th Five-Year Plan period, registering growth of 26% over the previous five-year plan. During the past three quarters, investment into fixed assets reached 74 billion yuan, marking a rise of around 20% year on year. This achievement symbolizes our efforts in counteracting the pandemic's impact with project coordination and construction monitoring.

Fourth, construction work has been highly effective. The refurbishment and expansion of many key airports has progressed smoothly. As a result, they have played a significant role in ensuring the support of the once insufficient infrastructure capacities of civil aviation by the end of the 13th Five-Year Plan period. The new projects and plentiful reserve have reinforced the foundation for infrastructure construction during the next five-year plan. Following the requirements of General Secretary Xi, who called on us to build high-quality projects with zero accidents and no corruption, we have resolved to win consent from both the Party and the people with our constructions exemplified in particular by Beijing Daxing International Airport. Meanwhile, based on certain prerequisites, we proposed four additional guiding principles of "safe, smart, green and people centered" for future airports. These principles will be applied to the standards and quality designs as well as the functions and effects of airports in the future. 

In addition, our modern large-sized airports will be included in the construction of holistic transport systems, especially the integration with high-speed railways. Centered around the building of large and essential international airports, we will accelerate the construction of our comprehensive transport system. By 2019, 25 out of 39 airports, each with a capacity of over 10 million, have been connected with 37 rail lines. This development is still continuing.

Fifth, this construction work supports the implementation of national strategies. Since the beginning of the 13th Five-Year Plan period, we have built 31 small and non-key airports, relocated eight small airports and expanded the capacity of 34 airports. Among these, 50 are located in western, border or impoverished areas. So far, 92% of prefecture-level cities, 88% of the population and 93% of GDP are within a 100 kilometer radius of civil aviation services, with these figures increasing by 4.8, 3.6 and 2.4 percentage points respectively during the past five years. This work has contributed to the critical phase of China's poverty-alleviation campaign, the development of the western regions and efforts to boost border areas to allow local people to live in abundance. Thank you. 

CNR:

My question is for Minister Li Xiaopeng. You mentioned that the Ministry of Transport has invested a total of 950 billion yuan of vehicle purchase tax revenue during the 13th Five-Year Plan period in the construction of road projects in impoverished areas. Could you please explain in more detail how this money is being spent? Can you also share some highlights and experiences from your work? Thank you.

Li Xiaopeng:

Thank you for your question. During the 13th Five-Year Plan period, the central government has invested a large amount of vehicle purchase tax revenue in supporting road construction projects in impoverished areas. People are very concerned that where the money has been invested and what the results have been. At this stage, as I just said, investment has exceeded 950 billion yuan. So far, the exact figure is 953.8 billion yuan for highway projects in impoverished areas.

In terms of categories, the investment in expressways is 286.9 billion yuan, the renovation of national and provincial roads is 356.7 billion yuan, and the investment in rural roads is 310.2 billion yuan. In terms of different regions, 60.3 billion yuan has been spent to impoverished areas in east China, 146.3 billion yuan in impoverished areas in the central region, and 747.2 billion yuan in impoverished areas in the west. In terms of results, from 2016 to 2019, we supported the construction and reconstruction of 16,900 kilometers of national expressways in poor areas, 52,500 kilometers of ordinary national highways, construction of around 96,000 kilometers of tarmac and cement roads in natural villages with large populations in poor areas, and completed safety and life protection projects along around 458,000 kilometers of countryside roads. A total of 143,000 kilometers of narrow subgrades and pavements were widened and reconstructed, and around 15,000 dangerously dilapidated bridges were rebuilt. These projects have had very good results.

During this work, our main experience has been that the strong leadership of the CPC Central Committee is the fundamental guarantee for doing this work well. Support from all sides and the efforts of the whole industry are a solid foundation for doing this work well. If you would like to know about specific work experiences, I would say there have been four points. First, raising standards and continuing to increase investment. Second, continuing to work hard and insisting on precise policy implementation. Third, carrying out strict supervision and preventing falsehoods. Fourth, making effective connections with the rural revitalization strategy.

Going forward, the Ministry of Transport will continue to implement the spirit of the important instructions made by General Secretary Xi Jinping on poverty alleviation, and maintain the momentum of poverty alleviation in transportation. We should start well and end well; do positive things and achieve good results. We will not retreat until we have achieved victory, and will make greater contributions for the development of transportation in poor areas. Thank you.

Hu Kaihong:

That concludes today's press conference. Thank you, minister and directors. Thank you everyone.

Li Xiaopeng:

Thank you, Mr. Hu Kaihong.

.

Read in Chinese

Speakers:

Wang Zhigang, minister of the Ministry of Science and Technology.

He Defang, vice secretary of the Ministry of Science and Technology.

Xu Jing, director-general of the Department of Strategic Planning, Ministry of Science and Technology.

Qin Yong, director-general of the Department of High and New Technology, Ministry of Science and Technology.

Wu Yuanbin, director-general of the Department of Science and Technology for Social Development, Ministry of Science and Technology.

Chairperson:

Hu Kaihong, spokesperson for the State Council Information Office.

Date:

Oct. 21, 2020

Hu Kaihong:

Ladies and gentlemen, welcome to this press conference held by the State Council Information Office. During the 13th Five-Year Plan (2016-2020) period, we have made major achievements in building an innovation-oriented country. Today, we are glad to invite Minister of Science and Technology Wang Zhigang to introduce the strategy of promoting innovation-driven development and our efforts to build China into an innovation-oriented country before answering your questions. Also present are: Vice Secretary of the Ministry of Science and Technology He Defang; Director-General of the Department of Strategic Planning Xu Jing; Director-General of the Department of High and New Technology in Yong; and Director-General of the Department of Science and Technology for Social Development Wu Yuanbin.

First, let's give the floor to Mr. Wang.

Wang Zhigang:

Good afternoon everyone. Firstly, I'd like to thank the media for your objective and professional reporting on our work on science and technology, as well as your attention and support for scientific and technological innovation. I am so pleased to meet you and share information with you about the scientific and technological innovation progress of the 13th Five-Year Plan.

The 13th Five-Year Plan period is a decisive stage in the building of a moderately prosperous society in all respects, and also a critical period for making China a country of innovators. In the face of a complex and severe international situation and the urgent domestic demand for scientific and technological innovation arising from China's pursuit of high-quality development, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the scientific and technological community have implemented the new development concept and carried out the innovation-driven development strategy. Aiming for the frontiers of science and technology, and to support economic development, meet the major needs of the country, and protect people's health, we have strengthened basic research and application-oriented basic research, made greater efforts to achieve breakthroughs in core technologies in key areas, strengthened efforts to build up China's strategic capacity in science and technology, advanced the reform of the scientific and technological system in a systematic manner, and expanded opening-up and cooperation in the field of science and technology. As a result, our innovation system and environment have improved, and innovation ability remarkably enhanced, playing an increasingly prominent role in supporting and guiding China's efforts to foster a new development architecture and promote high-quality development. The COVID-19 epidemic has further tested our building of the innovation system, our scientific ability and level, technology reserve and emergency response capacity. Chinese science and technology workers demonstrated a strong patriotic spirit, a strong sense of responsibility, professionalism and a high level of ethics in the fight against the epidemic, which are respectable and unforgettable. We have gained more confidence and tenacity for innovative development in serving national rejuvenation and tackling the once-in-a-century changes in the world.

I will share some data with you all. The past five years have witnessed an increase of China's R&D spending from 1.42trillion yuan to 2.21trillion yuan. Investment in R&D has risen from 2.06% of GDP to 2.23%.The basic research spending has almost doubled, and reached 133.6 billion yuan in 2019. We have doubled the volume of contracted technology transactions, reaching over 2.2trillion yuan in 2019. The Global Innovation Index issued by the World Intellectual Property Organization (WIPO) shows that China has leapfrogged from the 29th in 2015 to 14th in 2020. In sum, China has seen improvement in both the quality and quantity of technological innovation, making significant progress in becoming technology country of innovators.

Wang Zhigang:

During the past five years, we have strengthened basic research, made technological breakthroughs in key and core areas, and advanced our technological capabilities. We have achieved a group of important results in various aspects, including quantum information, iron-based superconductivity, stem cells and synthetic biology. The Chang'e-4 probe successfully landed on the far side of the moon; the last BeiDou Navigation Satellite System (BDS) satellite has been launched to complete a global navigation constellation; the passenger aircraft C919 completed its maiden flight; the Dark Matter Particle Explorer Wukong and quantum science satellite Mozi were launched; construction of facilities for magnetically confined nuclear fusion and the China Spallation Neutron Source (CSNS)saw significant breakthroughs, and the layout of the key national laboratories has been speeded up, providing more support to high-level scientific research.

During the past five years, we have deepened the integration of science and technology with the overall development of economy and society, and made fresh progress in supporting and leading high-quality development. Major projects in science and technology have been successfully concluded, and major achievements recorded in mobile communications, new medicine development and nuclear power. The high-speed Fuxing bullet trains are now in operation; the Hong Kong-Zhuhai-Macao Bridge was opened to traffic, and the applications of 5G, artificial intelligence, block chain and new energy have been accelerated. The construction of innovation centers in Beijing, Shanghai and Guangdong-Hong Kong-Macao Greater Bay Area have been accelerated. A total of 21 national innovation demonstration zones and 169 new- and high-tech development zones have become pioneers for local innovation and development. The GDP of new- and high-tech development zones increased to 12.2 trillion yuan from 8.1 trillion yuan at the start of the period, an increase of more than 50% in five years. The number of new- and high-tech enterprises increased to 225,000from 79,000. After the outbreak of the epidemic, national new- and high-tech development zones and new- and high-tech enterprises have played important roles in resuming production and supporting the economy to remain stable. From January to June, the operational revenue of national new- and high-tech development zones reached 3.9 trillion yuan, with a year-on-year growth of 14.7%; total profit was 351.58 billion yuan, up 17.7% year-on-year; the number of newly registered enterprises reached 223,000, a year-on-year gain of 11.9%. Innovation and entrepreneurship have showed a strong momentum of development.

During the past five years, we have constantly deepened reform of the science and technology system, and further improved the environment for innovation. We have pushed forward the reform of national science and technology management institutions, and completed the top-level design for innovation-driven development. The framework of reforming the management system for science and technology has been basically established, and reforms in the areas of management for science and technology initiatives, application of scientific and technological achievements, sharing of resources, evaluation and reward, and income distribution, have all made substantial progress. We have press ahead with reforms to streamline administration and delegate power, improve regulation, and upgrade services. We have initiated seven actions to reduce the burden of researchers, and made efforts to change their work and study styles. A favorable environment for innovation and entrepreneurship has been created through the advancement of Science and Technology Innovation Board, or STAR Market, the national seed fund for encouraging the application of scientific and technological advances, and maker spaces.

During the past five years, we have cultivated a large number of scientific and technological personnel, and further improved the talent structure. The number of R&D personnel (full-time equivalent)increased from 3.76 million in 2015 to 4.8 million in 2019.An increasing number of leading professionals and innovation teams keep emerging, and young scientific and technological professionals have gradually become the main force in scientific research. We have established a new talent evaluation system oriented towards innovation ability and quality contribution, and are exploring ways to introduce international peer evaluation. We have also promoted a mechanism for optimizing and integrating work permits, talent visas and permanent residence, and carried out trials of all-in-one cards for providing services for high-end foreign talents.

During the past five years, we have become actively involved in the global innovation network, and formed an open and cooperative pattern of S&T research that is all-dimensional, multi-tiered and wide-ranging. We have further strengthened inter-governmental dialogues on innovation cooperation, and continued to implement S&T cooperation and partnership plans. All the key R&D programs are open to institutions in Hong Kong and Macao SARs. We have made steady progress in major international scientific programs and projects, and the Belt and Road Science, Technology and Innovation Cooperation Action Plan has been further implemented.

All these achievements relied on the correct leadership and scientific decision-making of the CPC Central Committee with Comrade Xi Jinping at its core, benefited from strong support of all local governments and departments, and the hard work and selfless dedication of all S&T workers and R&D personnel. I would like to express my highest respect and heartfelt thanks to all researchers and management staff. At the same time, I would also like to thank friends from all sectors of society, including the media, and friends from other countries for your understanding, respect and support to China's scientific and technological innovation.

In the following five years, under the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will further implement the strategy of innovation-driven development, coordinate development and security, adhere to the principle that "scientific and technological development must target the global science frontiers, serve the main economic battlefield, strive to fulfill significant needs of the country and benefit people's lives and health." We will give full play to S&T innovation in fostering a new development architecture and promoting high-quality development, continuously make progress in building China into a country of innovators, and strive for the goal of developing China into a world leader in science and technology.

Next, I would like to answer your questions, thank you.

Hu Kaihong:

Thank you, Mr. Wang. The floor is open for questions. Please state the news outlet you represent first.

Science and Technology Daily:

My questions are about basic research. General Secretary Xi Jinping called for persistence in strengthening basic research at a symposium attended by scientists in Beijing on Sept. 11. My question is, how does the Ministry of Science and Technology strengthen basic research and applied basic research? What important progress has been made in the field of basic research during the 13th Five-Year Plan period (2016-2020)? For instance, what kind of outstanding achievements have been made through the original innovation from "zero to one?" Are there any new measures in this regard? Thanks.

Wang Zhigang:

I will answer these questions. We all know that basic research, applied basic research, technological innovation, innovative uses of technology and industrialization are all involved in scientific research. Among them, basic research can be likened to the source of a waterway and the master switch of scientific research. In addition, the capability of basic research determines the character and sustainable momentum of a country's sci-tech innovation capability. The first-mover advantages always begin with basic research. People's discoveries, their grasping of the rules, and the summary and application of research approaches and patterns are the basis for, key to and even lie at the core of a country's sci-tech innovation capability. During the 13th Five-Year Plan, implementing the decisions made by the CPC Central Committee and the State Council, we perceived the main trends in new sci-tech revolution and industrial transformation, and met them while adapting to changes at home and aboard. Basic research and underpinning technological research and development have been taken as the breakthrough point for sci-tech innovation. We insist on the combination of free inquiry and goal orientation, focus more on original orientation and questions of basic research found in economic and social development and industrial practice, and promote the integration of basic research, applied basic research and technological innovation, so as to bring into full play the underpinning support and guiding role of basic research to sci-tech innovation.

First, we have strengthened the top-level design and systematic layout. Multiple Opinions on Strengthening Basic Scientific Research was issued, and the Work Programme for Strengthening Basic Research from "Zero to One" established and Multiple Measures on Strengthening Basic Research in the New Era implemented. These documents are first to specially strengthen basic research in the history at the national level. They stress basic research from "zero to one", the importance of maths, and also drive the systematic overhaul of the State Natural Sciences Fund. The Work Programme for Strengthening Maths-based Scientific Research has been issued to strengthen basic subject building. Thirteen national applied maths centers have been set up in cities such as Beijing and Shanghai. A batch of basic research projects have been deployed in major areas such as quantum science, stem cell, synthetic biology and nanoscience. Science satellites involving in dark matter and quantum science including Wukong, Mozi and Huiyan have been successfully launched. A group of internationally-significant original achievements have been introduced in major areas such as iron-based superconductor, quantum entanglement and key distribution, heterogeneous fusion brain-inspired chip, chiral molecular synthesis, heterozygous stem cell and graphene controllable folding, as well as a large number of leading talents and innovation teams in basic research cultivated.

Second, the investment in basic research has been sharply increasing through boosting central fiscal support and motivating local enterprises and social programs with government guidance, effective coordination at central and local levels and tax leverage. Investment in basic research increased from 71.6 billion yuan in 2015 to 133.56 billion in 2019, with an average annual growth rate of 16.9%, which is far greater than that of China's total research spending. In 2019, investment in basic research accounted for 6% of the total for the first time.  

Third, we have stepped up the building and sharing of major science and technology infrastructure. We have deployed and built a number of major science and technology infrastructures, including the Five-hundred-meter Aperture Spherical Radio Telescope (FAST) and the China Spallation Neutron Source (CSNS). We have established 20 national scientific data centers, 31 national biological germplasm and experimental material resource banks, and 98 national field scientific observation and research stations to promote the open sharing of scientific research facilities and instruments. More than 4,000 institutes, 101,000 sets of large-scale scientific instruments and 80 major scientific research infrastructures have been incorporated into the open and shared network.

Going forward, we will put basic research and application-oriented basic research higher on the agenda of China's science and technology work. At the same time, we will reform and improve the mechanism for project development. The ability to accurately raise and describe questions is essential to basic research. We will explore ways to create a mechanism for discovering issues which aim for the frontiers of science and technology. We will establish a mechanism for managing and supporting non-consensus projects and disruptive technologies. We will further increase investment in basic research, optimize the investment structure, and strengthen long-term support for unpopular disciplines, basic disciplines and interdisciplinary work. In this way, we aim to offer better services to scientists and researchers dedicated to their work, and to support them in breaking new ground. Thank you.

CCTV:

Many documents and measures have been introduced in recent years to reform the management system for science and technology. What progress has been made? What steps will be taken to further reform and improve the environment for scientific and technological innovation?

Wang Zhigang:

Thank you for your question. As General Secretary Xi Jinping emphasized, to promote the development of science and technology, we should strive for both scientific and technological innovation and institutional innovation. Reform and innovation are closely connected with each other. Reform is targeted at production relations, and innovation at productive forces. Productive forces determine production relations. Production relations should comply with productive forces and can play an active role in their development. We have been implementing a series of important thoughts on scientific and technological innovation set forth by General Secretary Xi since the 18th CPC National Congress held in 2012. We have been coordinating our work on reform and innovation to spur innovation through reform and promoting development through innovation. The Outlines on National Strategy for Innovation Driven Development and an action plan to deepen the reform of the management system for science and technology have been issued, and the latter introduced a total of 143 specific measures. 

We have been adhering to the principle that the scientific and technological development must target the frontiers of global science, serve the economic battlefield, strive to fulfill the significant needs of our country and benefit people's lives and health. With the goal of building a systematic, complete and efficient national innovation system, we have adopted a coordinated and systemized approach to plan and promote the development of science and technology initiatives. Science and technology have become an established force at the center of our national development. 

Focusing on tapping into the enthusiasm and innovative potential among researchers and innovators, we have been working to optimize the allocation of scientific and technological resources, improve the governance system on scientific and technological innovation, and create a favorable climate for innovation, to push for the reform on the management system for science and technology on all fronts. Significant progress has been made in reform in key areas. A complete implementation system integrating laws, policies, measures and action has been established. The potential of science and technology as the primary forces of production has been further unleashed, so has that of innovation as the primary driving force, and talent as the primary resource.

The following is the major progress we have achieved so far. First, to fulfill urgent strategic national needs, we've improved institutions and organizational systems for advancing scientific breakthroughs and emergency-related research. We strived to build up China's strategic capacity in science and technology by building national laboratories for major fields of innovation and restructuring the system of key national laboratories to meet the demand for scientific R&D concerning major national programs. We organized elite scientists and researchers drawn from all over the country to pursue scientific and technological breakthroughs inCOVID-19 prevention and control. We made result-oriented efforts, aimed for appropriate applications, and combined scientific research with clinical treatment. As a result, we achieved a group of practical and effective outcomes in such fields as drug, vaccine and testing, thus contributing to an overall victory in the battle against the virus.

Second, we worked to see that science and technology become more deeply embedded in the economy and promoted the transfer and commercialization of scientific and technological achievements. The Law on Promoting the Application of Scientific and Technological Advances was amended, and quite a few related policies and regulations were introduced. The right to use, transfer and profit from scientific and technological achievements was delegated, and scientific researchers were granted ownership right and the right to long-term use of the scientific and technological achievements made at their posts. Work began to establish a national technology transfer system and demonstration zones for the transfer and commercialization of scientific and technological achievements. In 2019, there were more than 1,000 technology trading markets in China. For the first time, the total value of contracted technology transactions reached 2trillion yuan, 3.5 times that of 2012. New platforms were set up to strengthen financial support for technological innovation. The Shanghai Stock Exchange launched a sci-tech innovation board, with a registration system being piloted for the listing of companies.185 companies have been listed on the sci-tech innovation board, with a total market value of more than 3 trillion yuan. Basically, all those listed companies are high-tech companies.

Third, we stepped up efforts to develop synergy among industries, universities and research institutes, and to energize various kinds of innovators. We encouraged enterprises to undertake major national scientific and technological programs. More than 75% of key national research and development programs now involve the participation of enterprises. We offered incentives for enterprises to increase investment in R&D, such as raising the portion of spending on R&D by enterprises that are eligible for tax deductions from 150% to 175%. Reforms to streamline administration, delegate powers, improve regulation, and upgrade services continued apace. We helped 44 universities and institutes launch a pilot scheme of increasing autonomy in their research activities, which has produced positive effects. A group of market-oriented research institutions with flexible mechanisms has been established. We made strong moves to encourage scientific and technological innovation and entrepreneurship, such as improving maker spaces, incubators and start-up accelerators.

Fourth, we continued to adopt both incentives and constraints in order to create a favorable climate for innovation. We improved a system for category-based management of scientific and technological personnel which complies with the law of their research activities. We don't resort to administrative staff management measures when handling cases in which scientific and technological personnel go abroad, do part-time jobs or start a business after resignation. Profit distribution policies were improved with the goal of strengthening the value ascribed to knowledge. The assessment system for scientific research was reformed and upgraded. Strong measures were rolled out to get rid of the practice of viewing essays, professional titles, educational backgrounds and awards as overwhelming criteria. We implemented seven initiatives to reduce the bureaucratic burden on scientific researchers. We made efforts to address issues of greatest concern to scientific researchers, including too many forms to fill in, onerous reimbursement procedures and too many inspections to undergo. We reformed and improved the academician selection and management system. We urged action to improve conduct and promote a good style of study among the personnel working in the science community. We promoted integrity and improved joint punishment mechanisms. Many cases, including those related to the retraction of multiple articles in Tumor Biology and genetically-edited babies, were severely punished or prosecuted, with relevant information open to the public in a timely manner. We bear zero tolerance toward research misconduct.

Fifth, we deepened the central fiscal management reform for national science and technology initiatives to improve the allocation efficiency of science and technology resources. We integrated nearly 100 science and technology projects originally undertaken by different departments to make resource allocation more centralized and efficient. We finished building an open and unified national science and technology management platform and entrusted the management of research programs to specialized agencies. We reformed project and economic management, streamlined the compilation of budgets, and increased the proportion of indirect costs. We launched a pilot scheme of lump-sum project-funding at the National Natural Science Foundation. Scientific and technological leaders were granted greater autonomy in the utilization of human, financial and property resources to better serve their creativity.

Meanwhile, we should be aware that much remains to be done regarding the reform of the management system for science and technology, and we need to surmount more difficulties in removing deep-rooted institutional barriers. General Secretary Xi stressed that reform is an on-going process with no end point. We will continue to deepen the reform to ensure that relevant decisions and plans are carried out without fail and areas of weakness are improved. We will further optimize the system for scientific and technological innovation and systematically build up China's strategic capacity in science and technology. We will strive to develop a new type of national system for breakthroughs in core technologies under the conditions of the socialist market economy. We will continue to foster favorable policy, legal, social and cultural environments. Through all these efforts, we aim to provide comprehensive institutional guarantees for building China into a global leader in innovation and allow the country to become a science and technology giant. Thank you.

China National Radio (CNR):

To our knowledge, a number of new key scientific and technological programs and projects were introduced under the 13th Five-Year Plan, and they have played a fairly important role in China's social and economic development. Could you elaborate on some of the typical achievements in cutting-edge technologies? And how big of a part do they play in supporting the construction of major national projects, fostering and developing new growth drivers, and promoting high quality development? Thank you.

Qin Yong:

Thank you for your questions, and I will brief you on the situation accordingly. China's socio-economic development has been transitioning to a high-quality stage under the 13th Five-Year Plan, which requires strong support of technologies and innovation. In accordance with the plan deployment, the Ministry of Science and Technology has been focusing on the development of both emerging and cutting-edge technologies and strengthening R&D efforts on sectors. Positive progress has been made to foster and develop new growth drivers, supporting the construction of major national projects, and promote high quality economic development, specifically in the following aspects:

First, a series of emerging and cutting-edge technologies and major advancements in key areas have been introduced, further enhancing our capacity of sci-tech innovation. During the 13th Five-Year Plan, the Ministry of Science and Technology has redoubled its efforts in planning advances the strategic high technologies, and a series of breakthroughs have been made in fields such as supercomputing, rail transit, quantum information, and additive manufacturing. China remains competitive in supercomputing. The number of our supercomputers accounts for 45% of the world's Top 500 rankings. Meanwhile the country is developing an exascale supercomputer after completing the development of a prototype exascale computer. In terms of advanced rail transit, a prototype magnetic levitation train, with a speed of 600 kph, has completed system checks on a test track. A prototype of a high-speed train with a speed of over 400 kph rolled off the assembly line in Changchun city on Oct. 21. All these breakthroughs contribute to the development of a high-speed rail system with a Chinese brand name. In regard to quantum information, with the experiments including the quantum science satellite Mozi and the line between Beijing and Shanghai, the prototype of the first space-ground integrated quantum communication network has taken shape.

Second, new growth drivers have been fostered and developed to support China's high-quality economic development. During the 13th Five-Year Plan, the distribution of emerging and cutting-edge technologies has been highlighted, and progress made in the fields such as new energy vehicle (NEV), telecommunications, third-generation semiconductors and new-type displays. These have effectively guided the development of strategic emerging industries. With more R&D efforts made in NEV's batteries, electric-powered engines and electronics controllers, China has been working to establish a relatively complete industry chain of NEV, which has enabled it to lead the world for five consecutive years in manufacturing and sales of NEVs. The number of NEVs exceeded four million, accounting for over 50% of the world's total. In terms of telecommunication, China has led the world in 5G technology with the largest number of core 5G patents. It also spearheads the commercial use of 5G technologies. There are over 600,000 5G base stations in China, and the number of users has exceeded 110 million. As for new-type displays, by promoting the integration between the innovation value chain and industry chain, China has quickly improved the overall competitiveness of its new-type displays industry. The sales of this sector in 2019 exceeded 300 billion yuan, ranking first in the world.

Third, efforts have been made to bolster the construction of major national projects in order to meet the strategic needs of the country. For the construction of the Hong Kong-Zhuhai-Macao Bridge, significant technological support was provided by systematically arranging key R&D efforts of the cross-sea cluster project. For the construction of the Sichuan-Tibet railway, MOST has provided sci-tech support for the construction's feasibility study, while planning in advance the study on major equipment. The ministry has intensified efforts to solve difficulties in core technology concerning the whole system of hard-rock tunnel boring machines and their core components. All of these efforts will provide self-reliant equipment support to the construction of Sichuan-Tibet railway, known as "a project of the century."

Looking ahead to high-tech development for the 14th Five-Year Plan, MOST will fully implement General Secretary Xi Jinping's guidance that scientific and technological development must target the global science frontiers, serve the main economic battlefield, strive to fulfill significant needs of the country and benefit people's lives and health. In accordance with the strategic requirement of fostering a new, dual-cycle development architecture, and in order to solve the contradiction between the need for high-quality development and the lack of sci-tech innovation capacity, we will make more efforts to develop high technologies. First, the Ministry of Science and Technology will strengthen its efforts in forward-looking deployment work, developing new-generation high technologies featuring intelligent and quantum technologies, so as to foster China's first-mover advantages in the sector. Second, the Ministry of Science and Technology will strengthen R&D efforts in key fields and links, providing more high-tech supplies for high-quality development. Third, it will accelerate its efforts to develop the new-generation high-tech industries, further fostering the new growth drivers. Thank you.

Guangming Daily:

What is the latest development on the technology front in response to the COVID-19pandemic? Please brief us on this issue. Thank you.

Wu Yuanbin:

Thank you for your question. Since the COVID-19pandemic, China's science and technology community has resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council and set up scientific research teams led by the Ministry of Science and Technology, focusing on five major fields including etiology, detection technology and products, clinical treatment and drugs, vaccine research and development, and animal models. In accordance with the "traceable, diagnosable, curable, preventable, and controllable" prevention and control requirement, we brought together the country's top researchers to conduct scientific research, which yielded positive results. We isolated and identified the pathogen and shared the coronavirus genome sequence with the world, laying a foundation for other countries to carry out coronavirus research, diagnostic reagent development, drug screening, and vaccine development. Within 14 days after the release of the coronavirus genome sequence, we completed the research and development of nucleic acid detection reagents and quickly put it into use. In addition, we have continued to improve the performance of nucleic acid detection products. At present, our testing reagents can meet the testing needs of current epidemic prevention and control under different scenarios.

During the epidemic prevention and control period, we quickly screened various drugs and therapies and put into use effective drugs and therapeutics, including chloroquine phosphate, traditional Chinese medicine, convalescent plasma treatment, and stem cell therapy. We have kept improving the diagnosis and treatment plan to increase the cure rate and reduce the mortality rate. In terms of the COVID-19 vaccines, we have been promoting the research and development of safe and effective vaccines in a scientific and orderly manner. At present, 13 Chinese COVID-19 vaccine candidates in five categories have entered the stage of human trials; four of them have started phase-3 clinical trials. China now has the largest number of vaccine candidates that have been approved for clinical trials, leading the world in this field.

During the epidemic prevention and control period, we have also done other fundamental researches, including developing a variety of COVID-19animal models, which provided key technical support for identifying the pathogenesis and transmission pattern and promoting drugs and vaccines development from laboratory tests to human clinical trials. Under the correct leadership of the CPC Central Committee, the Chinese science and technology community has been dedicated to the fight against COVID-19and made these hard-won gains. During the 13th Five-Year Plan period, the Ministry of Science and Technology has placed technological development that is related to people's livelihood in a more important position, formulated special scientific and technological plans, and fostered innovation in the field of life and health. We have invested more in areas such as prevention and control of major diseases, reproductive health, food safety, and environmental improvement, and enhanced the innovation capabilities in these aspects. All achievements we've made can be attributed to the above efforts. Thank you.

China Education Television:

General Secretary Xi Jinping emphasized that great scientific and technological capacity is a must for China to improve its competitiveness on all fronts. What are the major developments of China's technological innovation capabilities during the 13th Five-Year Plan period? In particular, what progress has been made in the cultivation of high-end talents and the construction of innovation platforms and bases? Thank you.

Xu Jing:

Thank you. During the 13th Five-Year Plan period, China's scientific and technological innovation capabilities have achieved historical, holistic and structural development. Quantitative changes lead to a qualitative leap. With one technological breakthrough after another, China has improved its overall technological innovation capabilities. I will illustrate it with the following four aspects.

The scientific and technological talent teams have been optimized. Talents are primary resources. During the13th Five-Year Plan period, China's total full-time equivalent R&D personnel has increased by 1 million. The number of full-time equivalent R&D personnel per 10,000 employees increased from 48.5in 2015 to 62 in 2019. Fully implementing the national plan for cultivating scientific and technological professionals, we have set up high-level innovation talent teams and helped them hone abilities by undertaking major scientific and technological tasks. We have strengthened the training of young professionals and set up projects for scientists under 35 to carry out. The talent structure has been optimized, and a group of top scientific and technological professionals have made their presence felt in the world. According to data from international organizations, China (including Hong Kong and Macao) has seen 735 researchers named the world's Highly Cited Researchers in 2019, an increase of 3.4 times compared to 168 in 2015. The influence of scientific research results in the international community has grown significantly. The number of highly cited papers in 2019 was 30,755, doubling the number in2015, accounting for 20% of the world's highly cited papers and ranking second in the world. Many outstanding scientists have won international awards, such as the Vega Medal in honor of achievements in geography, the Fritz London Memorial Prize in physics, and the Arthur C. Cope Scholar Awards in chemistry.

Second, we have accelerated the construction of innovation bases and platforms, such as national laboratories and state key laboratories. The construction of major scientific infrastructure has been steadily advanced, providing a good foundation for scientific research.

Thirdly, the status of enterprises as the mainstay of innovation has been strengthened. Enterprises are the most critical players in China's technological innovation. In 2019, 507 Chinese companies were put on the shortlist for Research and Development Investment of Top 2500 Companies Around the World. These 507 companies' business scopes are mainly in modern high-tech fields, such as drones, e-commerce, cloud computing, artificial intelligence, and mobile communications. The number of high-tech companies reached 225,000 in 2019, an increase of 1.8 times from2015. The innovation capability of enterprises continues to increase. China's PCT patent applications had increased from 30,000 in 2015 to 59,000 in 2019, ranking first in the world. The combination of technology and finance facilitates the development of enterprises. In the past five years, technology and finance have developed rapidly, and the multi-level capital market has provided powerful external resources for the application of scientific and technological innovation achievements. For listed companies just mentioned, as of Oct. 14, 183 Chinese science and technology enterprises had been listed on the science and technology innovation board, of which 173 are high-tech enterprises. The capital market and science and technology enterprises have supported each other, creating a virtuous circle.

Finally, we work to accelerate the formation of regional innovation clusters. In the past five years, rapid development has been achieved in the construction of science and technology innovation centers in Beijing, Shanghai, and Guangdong-Hong Kong-Macao Greater Bay Area (GBA). Also, the construction of the Chengdu-Chongqing Science and Technology Innovation Center began recently. According to an assessment of the World Intellectual Property Organization, 17 regions of China have entered the top 100 global innovation clusters list. Among them, the GBA, Beijing, and Shanghai made the top 10. These achievements demonstrate that China's overall technological innovation capabilities have been improved during the 13th Five-Year Plan period. Thank you.

CNS:

We all know that one of China's two centenary goals is to build a moderately prosperous society in all respects by 2020.Science and technology is a primary source of productivity growth. What role has the primary source played in realizing the centenary goal, especially in the fight against poverty in impoverished areas? How can we further leverage the role of science and technology in consolidating the progress in poverty alleviation and realizing the rural revitalization? Thank you.

He Defang：

Thank you for your questions. You are quite right. Since the 18th National Congress of the CPC, the leading Party members' group at the Ministry of Science and Technology has adhered to the important statements of General Secretary Xi Jinping on poverty alleviation work as the basic principle, fully implemented the decisions and arrangements of the CPC Central Committee on poverty alleviation, and adhered to the strategy of targeted poverty alleviation. The group has also organized and mobilized the scientific and technological forces of the entire society, and carried out the "hundred, thousand and ten thousand "scientific and technological project of poverty alleviation, achieving solid progress. I would like to answer your question from two aspects: systematic promotion by the scientific and technological industry and the comprehensive efforts in targeted poverty alleviation.

The scientific and technological industry has systematically promoted the work in poverty alleviation. First, we have focused on the technological bottlenecks appearing in the agricultural sector and empowered the capacity of poverty alleviation programs in a targeted manner. Over the past five years, 37,600 science and technology-related advances have been achieved, and more than 50,000 new varieties and technologies have been popularized, improving industrial quality and efficiency in poor areas. Second, targeting the weak link represented by a lack of sci-tech talents in poor areas, we have selected and dispatched appropriate staff to these regions. Sci-tech personnel of various levels and types have been organized to provide intellectual support for the development in impoverished areas. Technicians providing sci-tech services to ensure full coverage of entrepreneurship-driven development in villages registered as living under the poverty line has been basically achieved. Third, we have focused on the weak link that is a lack of sci-tech resources in impoverished areas and integrated innovation resources in a precise way. China has given preferential support in poor areas to construct national and provincial-level agricultural sci-tech parks and innovation platforms such as maker spaces. The parks and platforms, totaling 1,152 according to preliminary statistics, have promoted the flow of sci-tech elements to needy areas.

Second, comprehensive and redoubled efforts have been made to fight against poverty in designated poverty-stricken counties. I checked the data and found the Ministry of Science and Technology actually started its pairing assistance work in 1989. So far, a total of 30 groups have been sent out. Since the Central Conference on Poverty Alleviation, the sci-tech industry management system has formed a "four-level synergy" mechanism. By attracting and cultivating talents, transforming technological advances and supporting relevant industries, the five designated impoverished counties of Jinggangshan, Yongxin, Pingshan, Zhashui and Jiaxian have all been lifted out of poverty, with Jinggangshan the first to do so in 2017. Since 2016, we have invested 220 million yuan and introduced over 1 billion yuan to pair with and assist the five counties. The vegetables in Jinggangshan, silkworms in Yongxin, tea leaves in Pingshan, edible fungus in Zhashui, coarse cereals in Jiaxian and other poverty alleviation industries with distinctive features have taken shape, fully showing sci-tech elements are indispensable in poverty alleviation and verifying the precision, sustainability and effectiveness of science and technology-based anti-poverty efforts. I am still the head of the 30thpoverty alleviation group sent by the Ministry of Science and Technology to Shaanxi, and I want to share a couple of short stories.

First, in recent years, MOST has helped build Zhashui in Shaanxi province into an innovative county and establish three innovation platforms there, including a big data center of edible fungus and an academician workstation. This has driven growth of 30 demonstration bases and realized an annual output value of nearly 300 million yuan in the edible fungus industry. General Secretary XiJinping commended the edible fungus in Zhashui by noting "small fungus, big industry". Second, we promoted the "hill-drop sowing technology in dry land with permeable mulching film" across Jiaxian county in Shaanxi in 2017.Not long ago, with the approval of Mr. Wang, I went to Jiaxian on an inspection trip, where I witnessed how technological help had secured stable production and income increase despite this year's drought in northern Shaanxi. This stable production was hard-earned. The selling price registered a great increase. However, the situation of the control group was quite different.

In the next step, the Ministry of Science and Technology will further implement the decisions and arrangements of the CPC Central Committee and the State Council on poverty alleviation, leverage the sci-tech advantages, and support and consolidate the progress in fight against poverty. We will continue to promote the organic link-up between poverty alleviation and rural revitalization, and to drive rural revitalization and development through innovation. Thank you.

Wang Zhigang:

I would like to add some information to the poverty alleviation work by MOST. First, as stated, it began in 1989 and Jinggangshan is the first county to shake off poverty. The science and technology-based poverty alleviation stresses helping people increase confidence in their own ability to lift themselves out of poverty and ensuring they can access the education they need to do so. Confidence is closely related with better education. When people acquire more knowledge and skills, have their own perceptions towards a problem and deal with it in their own way, they will become more ambitious and confident. In this sense, we improve people's knowledge and skills through science and technology to boost their confidence to make their own way out of poverty. In this way, they are also more likely to help others to get rid of poverty.

Second, in recent years, MOST has also organized and mobilized innovative resources in the more developed eastern regions to pair with and assist the less developed areas in the central and western regions in a targeted way. Activities of supporting the development of Ningxia Hui Autonomous Region, Inner Mongolia Autonomous Region and Yunnan province through science and technology have been carried out. Science and technology should not only make breakthroughs on the frontiers, but also should be comprehensively upgraded to support and serve national development and security as well as improvement of people's livelihood. Thank you.

Hong Kong Economic Herald:

My question is to Mr. Wang. What achievements have been made in supporting the Greater Bay Area with science and technology, please? What are the next steps in the regard? And what thoughts and considerations do you have in scientific and technological innovation for the 14th Five-Year Plan? Thank you.

Wang Zhigang:

The development of the Guangdong-Hong Kong-Macao Greater Bay Area is a major regional strategy of China. To measure its success, sci-tech development and diffusion as well as its contribution to the area's socio-economic advances, environmental and livelihood improvement are sure to be among the most important criteria. Thus, a very important plan for the area's progress is that of sci-tech innovation. In forming the plan, the combination of sci-tech strength of not only Guangdong, Hong Kong and Macao but also the rest of the country, is crucial to the overall development of the area, ranging from technology, science and research to industries and people's overall improvement. At the same time, a good environment for innovation should be fostered. Widespread, high-quality development of a region largely depends on the high-quality personnel, enterprises, research institutions and universities within it. Therefore, the Greater Bay Area should adopt people-oriented planning, provide a preferential environment for sci-tech research, and build a platform where people can integrate their personal improvement and fulfillment into the national development goal. This is a significant idea in devising the sci-tech innovation scheme for the Greater Bay Area.

We are now cooperating with Hong Kong, Macao, Shenzhen city and Guangdong province as well as sci-tech circles, industrial sectors and local governments to ensure top-level planning for sci-tech innovation. Concrete measures will be adopted to work out a proper scheme, formulate appropriate policies and laws, as well as cultivate a good cultural and social environment. Actions will be further taken to form a platform where sci-tech personnel can gather and build sci-tech infrastructure that can prop up local development. Your attention to these will be welcomed. Again, for the development of the Greater Bay Area, science and technology is one of the decisive factors. In a sense, the sci-tech success can determine the development of the Greater Bay Area. Thank you.

CGTN:

The world has undergone considerable changes which have affected the fields of science and technology. During the 13th Five-Year Plan period, what progress has China made in international scientific and technological cooperation? At the same time, under the current situation, what arrangements have China made in terms of international cooperation? Thank you.

Wang Zhigang:

Thank you for your question. The international situation has indeed affected us. Science and technology play an important role in both international competition and cooperation. The field of technology has become a key battleground, and we must rise to the challenge. Many Chinese companies, and especially high-tech companies and personnel, have been excluded and suppressed by some forces around the world. However, I think that science is in some sense a universal language and has its own objective laws. Therefore, international cooperation is necessary for the development of science and technology and we need to build a scientific community according to developmental laws. In addition, scientific research cannot be conducted behind closed doors. There is a Chinese saying:"When I walk along with two others, they may serve me as my teachers."With this viewpoint in mind, China has always been adhering to the correct path of cooperation in the reform and opening-up process where science and technology take center stage. We also recognize that over the past 40 years of reform and opening-up, including during the 13th Five-Year Plan period, China has not only participated in and benefited from scientific and technological opening-up and cooperation, but also contributed to global technological progress and human development. It is a reciprocal process. During the 13th Five-Year Plan period, we have continued to advance innovation with a global perspective and actively integrated into the global innovation network. We have promoted scientific and technological exchanges and cooperation in fields including basic research and global issues between scientists in China and from around the world, and jointly increased public knowledge and the collective wisdom of human society.

First, a comprehensive and multi-layer cooperation framework covering a wide range of areas has been formed. Bilateral and multilateral inter-governmental exchanges and cooperation in scientific and technological fields have been strengthened. We have established innovative dialogue mechanisms with multiple countries, and extensively participated in and promoted consultations and practical cooperation on issues of sci-tech innovation under multilateral mechanisms. At present, China has established such cooperation relations with 161 countries and regions, and signed 114 inter-governmental scientific and technological cooperation agreements, which are all part of various mechanisms. China has also participated in more than 200 international organizations as well as multilateral mechanisms related to science and technology.

Second, the Ministry of Science and Technology has actively participated and taken the lead in organizing and undertaking international big science research plans and projects. It has also actively undertaken tasks and fully participated in the operational management of major international scientific programs and projects such as the International Thermonuclear Experimental Reactor (ITER) project, Square Kilometer Array (SKA) radio telescope, and International Ocean Discovery Program (IODP). The Ministry of Science and Technology has been solving major technological and engineering difficulties in a proactive manner, and is playing an increasingly important role accordingly. It focuses on major issues concerning sustainable global development, is accelerating efforts to launch international big science research plans and projects which are led by China, and supports scientists of all countries to jointly conduct research. The role China plays in this regard has changed from an increased level of participation to taking the initiative.

Third, the Ministry of Science and Technology has fully implemented the Belt and Road Science, Technology and Innovation Cooperation Action Plan. General Secretary Xi Jinping proposed this action plan during the first and second Belt and Road Forum for International Cooperation (BRF). The plan consists of four aspects: the Science and Technology People-to-People Exchange Initiative, the Joint Laboratory Initiative, the Science Park Cooperation Initiative, and the Technology Transfer Initiative. We have supported over 8,300 young scientists from around the world to work in China, trained 180,000 personnel, and started construction on 33 joint laboratories with countries participating in the Belt and Road Initiative. We have also established official cooperation relations on science parks with eight countries, built five national tech transfer platforms, and launched a Sino-African sci-tech innovation cooperation center. A technology transferring South-South cooperation center has also been established under the UN's South-South cooperation mechanism, and the Belt and Road tech transfer network has been basically established.

We are delighted to see that more and more Chinese science and technology professionals are participating in international sci-tech undertakings, and are contributing Chinese wisdom to addressing major global issues. For example, amid the pandemic prevention and control work, China has earnestly fulfilled its international obligations by actively promoting the sharing of scientific data and information. China has established a scientific literature sharing platform which is open to the world. The platform has provided services for users in 175 countries and regions, with total downloads of data exceeding 160 million times. The platform has helped China share its anti-epidemic experience with the rest of the world, strengthened global R&D efforts and cooperation in vaccine, medicine and COVID-19 testing, and thus contributed to the global anti-pandemic efforts. China also takes the lead in animal models as we mentioned earlier. Not long ago, China officially joined the COVAX initiative, the COVID-19 vaccination plan co-led by the Global Alliance for Vaccines and Immunization, the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization (WHO). China will resolutely honor its solemn commitment to provide vaccines and other public goods for the world.

Looking ahead, China's resolve to promote the opening-up and cooperation on sci-tech is even stronger. Our determination in this regard is persistent. As I said at the beginning, science and technology requires international cooperation. China will take even bigger steps to promote international cooperation and communication in this regard at both government-to-government level and people-to-people level. China will work to make the BRIa path to innovation, joining hands with the rest of world to address major public health challenges such as COVID-19. China will open its doors even wider to the world regarding its science and technology plans, and provide greater convenience for overseas talents who work and open businesses in China. Through opening-up and cooperation, China will realize mutual benefit, understanding, respect and trust with the rest of the world. China will take on the responsibility of sci-tech innovation to build a community with a shared future for mankind.

China Daily:

The general public pays great attention to issues, such as scientific research ecology and integrity. In recent years, China has issued a series of rules and regulations. What problems do we currently have in terms of building work style and study style in the science and technology community? What can be further improved? Thank you.

He Defang:

Thanks for your questions. I want to make a point before answering your questions. Excellent scientific research work style and study style are the "lifeline" for performing well in science and technology works. General Secretary Xi Jinping has repeatedly emphasized the need to vigorously promote the spirit of scientists and strengthen the construction of scientific research work style and study style. The Ministry of Science and Technology should effectively improve its political position and make the construction of work style and study style a priority. Mr. Wang also introduced these in his statement just now. The Ministry of Science and Technology, in conjunction with relevant departments, will take various measures to advance the implementation.

For publicity and guidance, the "Spirit of Scientists" book series was compiled and published, and a column was set up to vigorously promote not only the spirit of scientists but also the spiritual outlook and innovative deeds of those outstanding scientists. Especially during the COVID-19 pandemic, the Ministry of Science and Technology and other departments issued the "Five Advocacies, "advocating science and technology to serve the country, advocating rigorous truth-seeking, advocating devoted research, advocating rational questioning, and advocating academic democracy. These advocacies actively guide scientific and technological workers to write papers for their motherland and apply the results to the fight against the pandemic. The response is positive.

In terms of environmental construction, the Ministry of Science and Technology has implemented a dual approach. On the one hand, it established an incentive mechanism based on trust. It has continuously deepened reforms on project review, talent evaluation, and institutional evaluation. In conjunction with relevant departments, it also formulated a series of documents for "breaking the four standards," which means China will not just evaluate talents based on thesis, professional titles, education levels, or awards and will carry out seven special actions to reduce the burden on the grassroots and stimulate innovation vitality. On the other hand, it insists that trust is not laissez-faire, and tolerance is not indulgence. Strengthening supervision and restraint is for building better trust and tolerance. We have issued rules for investigating and handling scientific research integrity cases, as well as regulations for handling violations in scientific and technological work, so as to draw red lines, define boundaries, unify standards, and strengthen supervision.

In terms of serious punishment, our attitude towards scientific research violations, such as paper falsification, has always been clear and resolute. That is, once discovered, the case will be dealt with, and we will never tolerate it. On Sept. 16, several scientific and technological violations were publicly revealed. Mr. Wang just introduced the handling of 107 problematic papers on tumor biology, which will shape a regular notification system in the future. Rule-abiding people should be protected, while violators should be restricted everywhere.

Since the 13th Five-Year Plan, various measures for the governance of scientific research work and study styles have been effectively implemented, and some deep-seated problems have gradually been resolved. However, we should also see that the phenomena of exaggeration, quick success, academic misconduct, and even fraud are still happening from time to time, and the task of dealing with work and study styles is still very arduous. In the next step, the Ministry of Science and Technology will work with relevant departments to further transform government functions and shift more energy to making strategies, policies, and guidelines, as well as creating environments and improving service. For some innovative entities, such as universities and scientific research institutions, we must earnestly shoulder the main responsibilities, strengthen education and guidance, enhance academic management, and expose and deal with bad work and study styles and violations. The vast number of scientific researchers must inherit fine traditions, abide by scientific research norms, and cherish academic reputation. The ministry will work with all sectors of society and scientific researchers to form a strong joint force, guard the "lifeline" of scientific and technological work, and promote the construction of China's scientific research style to achieve greater results.

Hu Kaihong:

Does Mr. Wang have anything to add?

Wang Zhigang:

Finally, I would like to express my gratitude to friends in the media, and thank you for your time and questions. Thank you all.

Hu Kaihong:

This concludes today's press conference. Thank you, Mr. Wang. Thank you to our four speakers, and thank you all.

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Read in Chinese

Speaker:

Zhao Yingmin, vice minister of ecology and environment

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office

Date:

Oct. 21, 2020

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to the press conference of the State Council Information Office (SCIO). The year 2020 is the final year of the 13th Five-Year Plan. In the following days, the SCIO will hold a series of press conferences to introduce the country's economic and social development over this period.

Today, I am very pleased to invite Mr. Zhao Yingmin, vice minister of ecology and environment, to brief you about issues regarding environmental protection in the 13th Five-Year Plan period and take your questions. First of all, I invite Mr. Zhao to make an opening statement.

Zhao Yingmin:

Thank you. Ladies and gentlemen, friends from the media, good morning! I am very pleased to have the opportunity to brief you about issues related to environment protection during the 13th Five-Year Plan period. First of all, on behalf of the Ministry of Ecology and Environment, I would like to thank you for your concern, support, participation, and guidance in regard to ecological and environmental protection.

Since the 18th National Congress of the Communist Party of China (CPC), under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, historic, transitional and overall changes have taken place in terms of ecological and environmental protection. The government has made greater efforts in this area than ever before. General Secretary Xi Jinping has pointed out on many occasions that China should uphold the concept that lucid waters and lush mountains are invaluable assets, adopt a holistic approach to conserving our mountains, rivers, forests, farmland, lakes, and grasslands, and improve the development of our geographical space so as to enhance ecological conservation and environmental protection.

The 13th Five-Year Plan period now drawing to a close marks the completion of the drive to build a moderately prosperous society in all respects and also in launching and gradually winning the critical battle of pollution prevention and control. In the past five years, we have regarded this as our main task. Major headway has been made in combating pollution and various ecological and environmental protection tasks, and the main objectives and tasks put forward in the outline have been basically accomplished. In the period, we have seen the greatest improvement in the quality of the national ecological environment and the best development of the cause of environmental protection so far. People's sense of gain, happiness and security in regard to their ecological environment has been continuously enhanced.

Compared to five years ago, the overall quality of the ecological environment in China has improved, and the phased goals of pollution prevention and control successfully achieved. As of the end of 2019, eight binding targets set in the 13th Five-Year-Plan for the protection of ecological environment have been completed ahead of schedule, including the desired percentage reduction of PM2.5 concentration in substandard cities at or above prefecture-level, the percentage of surface water with quality at or better than Grade III, reduction in the percentage of surface water with quality worse than Grade V; in addition, the carbon dioxide emission intensity per unit of GDP has been lowered, and there has been significant reduction of major pollutants discharge including chemical oxygen demand (COD), ammonia nitrogen, sulfur dioxide (SO2), and nitrogen oxides (NOx). From January to September this year, further progress has been achieved in terms of eight targets: the number of days with good air quality in cities at prefecture-level and above reached 87.2%, and it is expected that the binding target of 84.5% will be achieved by the end of this year. By the end of this year, the nine binding targets set for protection of the ecological environment established in the 13th Five-Year Plan outline will be fully completed.

At the same time, progress has been made in protection of the ecological environment on all fronts. Reforms to establish a sound ecological environment have gone smoothly. Laws, regulations, standards and policy systems have been continuously improved. Law enforcement in regard to the ecological environment has been continuously increased. Smooth progress has been made in major ecological conservation and restoration projects. Our ability to prevent and manage ecological environmental risks has been continuously improved. We have accelerated improvements in the ecological environment governance system and modernization of governance capacity. With these efforts and progress, we have laid a solid foundation for building of a moderately prosperous society in all respects.

In the next step, following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly putting into practice Xi Jinping's thinking on promoting ecological progress and the new development philosophy, and fulfilling the requirement for high-quality development, we will place greater importance on ecological restoration and environmental protection. While continuing to advance regular epidemic control, we will also promote economic and social development and ecological environmental protection. We will ensure stability on the six fronts (employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations) and security in the six areas (job security, basic living needs, operations of market entities, food and energy, stable industrial and supply chains, and the normal functioning of primary-level governments) and accomplish ecological and environmental protection tasks proposed in the 13th Five-Year Plan. At the same time, we will make overall plans of the 14th Five-Year Plan for protecting the ecological environment and scientifically identify the main objectives and tasks. With unremitting efforts, we will adhere to the same working direction and go deeper and further to continue to tackle pollution and promote ecological protection to a new level, establishing a good start for the 14th Five-Year Plan.

I would now like to answer your questions.

Shou Xiaoli:

Thank you, Mr. Zhao, for your introduction. Now, the floor is open for questions. Please identify your news outlet before you raise the question. Let's begin.

China Daily:

During the general debate of the 75th session of the United Nations General Assembly, General Secretary Xi Jinping announced China aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. What efforts has China made to address climate change during the 13th Five-Year Plan period? What progress has been made? What's the plan from now to implement General Secretary Xi Jinping's requirements on achieving the carbon emission target? In addition, how is the preparatory work proceeding for the 15th Conference of the Parties (COP15) to the Convention on Biological Diversity? What expectations does China have for the event? Thank you.

Zhao Yingmin:

General Secretary Xi Jinping put forward China's new target and vision for carbon emission at the general debate of the 75th session of the U.N. General Assembly, drawing wide attention and winning extensive praise internationally. China has implemented proactive national strategies on climate change, and adopted a series of measures such as adjustments in the structure of industry, improving the energy mix, energy conservation and improvements in efficiency, developing a carbon trading market, and enhancing forest carbon sinks. China has made remarkable progress in addressing the challenges of climate change during the 13th Five-Year Plan period.

First, it has efficiently mitigated greenhouse gas emissions. The carbon dioxide emissions per unit of GDP continue to decline, and the country has basically stopped the rapid increase in overall carbon dioxide emissions. By the end of 2019, we cut the intensity of carbon emission by 18.2% compared with 2015, meeting the binding objective set in the 13th Five-Year Plan ahead of schedule. The intensity of carbon emission is 48.1% lower than in 2005, and the share of non-fossil fuels in energy consumption has now reached 15.3%. These have met ahead of time the 2020 goals China promised to the world.

Second, China has made steady progress in energy conservation in key sectors. In 2019, the energy consumption per unit of added value of industry amongst enterprises above designated size declined by over 15% from 2015, the energy saved being equivalent to 480 million tons of standard coal. About 400 billion yuan was saved in energy cost. Green buildings account for 60% of newly-built civil buildings in urban areas. By renovating existing urban buildings with energy-saving facilities, we managed to improve building energy efficiency and optimize the living environment, bringing benefits to over 21 million households. Since 2010, China's new energy vehicle (NEV) industry has seen rapid growth, and its sales of NEVs account for 55% of the total amount globally. Currently, China also tops the world in terms of NEVs it holds.

Third, renewable energy has achieved rapid development. Since the beginning of the 13th Five-Year Plan period, installed capacity of renewable energy has been growing 12% annually on average, with its newly installed capacity exceeding 50% of the yearly total. Renewable energy has also seen steady increase in its share in China's total installed capacity, and has become an important factor in the country's energy transition and the main contributor to meeting future power needs. New energy represented by wind power and solar energy is growing rapidly, becoming key sources of renewable energy. As of 2019, installed capacity of new energy accounted for 55.2% of the total installed capacity of renewable energy. Hydropower and pumped-storage hydropower have both achieved steady development. By the end of last year, the installed capacity of hydropower accounted for 44.8% of the national installed capacity of renewable energy.

Fourth, China has made steady progress in proactively adapting to climate change. We have strengthened efforts in providing guidance to related sectors, carrying out trials in 28 cities to develop their climate resilience, as well as in 81 cities from six provinces to encourage low-carbon growth. The government has placed great emphasis on coordination between the adaptation to climate change and the conservation of ecology and environment. We have completed nationwide institutional reform and functional adjustment regarding adapting to climate change.

Fifth, China has actively participated in global climate governance. We adhere to multilateralism and contributed to the conclusion of a package of implementing guidelines for the Paris Agreement. China has been working with other countries to implement the Belt and Road South-South Cooperation Initiative on Climate Change. We help other developing countries to build their capacity in adapting to climate change. The announcement made by General Secretary Xi Jinping on Sept. 22 demonstrates China's strategic focus on resolutely adopting a green and low carbon approach. It also shows that China, as a responsible major country, will resolutely adhere to multilateralism and actively work to promote the building of a community with a shared future for humanity. This is greatly boosting confidence in the international community to jointly implement the Paris Agreement and promote green recovery of the world economy in the post-pandemic era. This also represents China's new efforts and contributions to adapting to global climate change, and provides significant political and market growth drivers for promoting sustainable and resilient economic recovery after the pandemic.

Looking ahead, we will continue to strategically focus on ecological conservation, working to deliver China's new Intended Nationally Determined Contributions (INDCs) and goal of carbon neutrality with greater determination and efforts. First, China will resolutely implement proactive national strategies on climate change, comprehensively strengthen efforts to adapt to climate change and work to establish an economic structure that facilitates green, low-carbon, and circular development. Second, China will take effective measures to control the consumption of fossil fuels. Greater efforts will be made to develop non-fossil fuels and carry out green and low-carbon campaigns in key sectors. China will accelerate its efforts to promote a green and low-carbon way of production and life, carry out campaigns for carbon dioxide emissions to peak and then decline, and establish a national market for trading carbon emission rights. China will promote green and low-carbon technological innovation, and effectively improve its climate governance capacity, so as to make greater contributions to the global efforts in addressing climate change.

In regard to the COP15 to the Convention on Biological Diversity that you mentioned, relevant preparations are proceeding, and we are negotiating with the countries involved. The preparatory work is making smooth headway. That's all. Thank you.

China Media Group:

Mr. Zhao, just now you said that the 13th Five-Year Plan period (2016-2020) saw the greatest and most effective environmental improvements. What are the specific achievements? What problems does China still have in matters of ecological environment protection during this period? What better arrangements can be worked out for the 14th Five-Year Plan period (2021-2025)? Thank you.

Zhao Yingmin:

Thank you for your question. This is a very general question. I will give you a brief introduction.

During the 13th Five-Year Plan period, all localities and departments have fully implemented the decisions and arrangements made by the CPC Central Committee and the State Council. We can say that great progress has been made in all aspects of ecological environment protection. The environmental improvement has really benefitted the Chinese people. Critical advances have also been made in other key areas of ecological protection, giving our people a far stronger sense of gain, security and happiness. The accomplishments during the 13th Five-Year Plan period can be summed up in several aspects.

First, strategic arrangements have been strengthened, and the whole society is more aware of the importance of ecological environment protection. Building an ecological civilization is vital to sustain the Chinese nation's development. The statement that "we should fully understand that lucid waters and lush mountains are invaluable assets" was added to the Party Constitution, and the term "ecological civilization" was written into the Constitution. More and more localities are promoting ecological progress as an opportunity and a key driver, striving to set themselves on a path that will achieve both economic development and environmental protection. Enterprises have taken measures to prevent and control pollution and discharge pollutants in accordance with the law. Their awareness of environmental protection laws and their leading role in environmental protection are being fostered at a faster pace. The whole society is more conscious of protecting the environment and is participating in and contributing to environmental conservation.

Second, the battle against pollution has progressed smoothly, and efforts to improve the environment have been intensified. Action plans for the prevention and control of air, water and soil pollution have been fully implemented. The CPC Central Committee and the State Council have published a guideline to comprehensively enhance ecological environment protection and win the battle against pollution of air, water and soil. A three-year action plan has been issued to win the battle for blue skies, together with other targeted action plans. The seven landmark battles (the battles for blue skies, diesel truck pollution treatment, water source protection, black and malodorous water bodies treatment, the Yangtze River conservation and restoration, comprehensive treatment of pollution in the Bohai Sea, as well as pollution treatment in agriculture and rural areas) have gone smoothly. The ecological environment has been continuously improved, giving a strong boost to high-quality development. Just now, I have given a briefing on the improvement of environmental quality during the 13th Five-Year Plan period. 

Third, the continuous enhancement of ecological environment protection has given a strong push to high-quality economic development. Energy conservation has been strengthened to increase energy efficiency. Major adjustments have been made to the energy mix to promote green and low-carbon development. As of 2019 during the 13th Five-Year Plan period, the carbon dioxide emissions per unit of GDP had dropped by a cumulative 18.2%; the installed capacity of the coal-fired power generators with ultra-low emissions nationwide had reached 890 million kilowatts, accounting for 86% of the total; the world's largest clean coal power supply system with ultra-low emissions had been established; our installed capacity and power generation of photovoltaic and wind power leads the world; clean energy had made up 23.4% of the country's total energy consumption; the coal ports in the Beijing-Tianjin-Hebei region had shifted their transportation channels from highways to railways; the railway cargo volume nationwide had increased by 7.2% year-on-year. We have strengthened the ecological red lines, environmental quality bottom lines, resources utilization ceilings, and the strict constraints of the negative list of ecological environmental standards for market access to improve the industrial layout and structure. By vigorously rectifying small, poorly-managed and heavily-polluting enterprises, the problem of the bad driving out the good in the market has been solved, creating a more level playing field for law-abiding enterprises. By gradually tightening pollutant discharge standards, industrial technology has been upgraded and the green development of enterprises has been promoted.

Fourth, a top-level planning system for ecological advancement has been established, which has promoted the fostering of a "general environment" for ecological protection. The systems, including the central inspection system for ecological and environmental protection, have delivered real results. The mechanism, by which both the CPC committees and governments are held accountable for environmental issues and that officials take responsibility for environmental protection in performing their duties, has been greatly strengthened. A number of systems, including pollution discharge permit, comprehensive administrative law enforcement for ecological environment protection, as well as compensation and accountability for ecological environment damages, have been formed. The reforms of examining and assessing ecological progress, river and lake chief systems and the vertical management of environmental monitoring, inspection and law enforcement functions in ecological and environmental departments below the provincial level have been accelerated.

Fifth, China plays an active role in global environmental governance, providing our wisdom, concepts and solutions to the world. China was one of the first countries to release a National Plan on Implementation of the 2030 Agenda for Sustainable Development. We have deposited the instrument of ratification of the Paris Agreement with the United Nations and made contributions to the adoption of the agreement's implementation guidelines. We have reached the 2020 carbon dioxide emissions target ahead of time, and announced that we will scale up our nationally determined contributions, strive to reach peak carbon emissions before 2030, and achieve carbon neutrality by 2060. China was among the first to sign and authorize the Convention on Biological Diversity. We actively prepared and organized the 15th meeting of the Conference of the Parties to the Convention on Biological Diversity, and jointly carried out the International Coalition for Green Development on the Belt and Road. The total amount of ozone-depleting substances eliminated by China accounts for over 50% of the total amount eliminated by developing countries. Hence, we are the country with the largest contribution to protecting the global ozone layer. Furthermore, during the 13th Five-Year Plan period, many projects, including the Saihanba Afforestation Community, the Zhejiang Green Rural Revival Program and Alipay Ant Forest, have been awarded the UN's Champions of the Earth award. 

As we have seen improvements to ecological environment and realized achievements of the 13th Five-Year Plan, we can clearly notice that there is still a gap between the current ecological environment and people's expectations. There is also a gap between the current status and the requirements for building a beautiful China. The domestic ecological environment still faces severe challenges. The pressures of ecological environment protection from many aspects, including structures, origins and trends, have been generally at a high level. The most prominent ones are the "three unchanged aspects." First, no fundamental changes have been made to industrial structures dominated by heavy chemicals, energy consumption which is reliant on coal, and transportation which is dominated by roads. Second, there were no fundamental changes in the serious conditions of environmental pollution and ecological environment protection. Third, the high-risk status and high frequency of ecological environmental incidents also remains fundamentally unchanged. The current international situation is undergoing complex and profound changes, risks and challenges have been gradually increasing, and unilateralism and protectionism are on the rise. Therefore, the work to protect the environment still has a long way to go.

Next, we will designate accomplishing the 13th Five-Year Plan as an important task, especially in terms of completing pollution control and prevention work. We will summarize the successful experiences and methods of preventing and controlling pollution. According to the goals outlined during the 19th National Congress of the Communist Party of China (CPC) to "achieve a fundamental improvement in the ecological environment and basically attain the goal of building a beautiful China by 2035," we should adhere to the orientation of green development and promote the green development transformation. This is also in line with the spirit of the upcoming Fifth Plenary Session of the 19th CPC Central Committee and the requirements of the 14th Five-Year Plan which will be reviewed by the National People's Congress. We should maintain a high-level of ecological environmental protection while promoting high-quality socioeconomic development. We should enhance the endogenous driving force for improving the quality of the ecological environment and adhere to the orientation of the goals and the results. With improving the quality of the ecological environment as the core, we must put equal emphasis on ecological protection and environmental governance, and we also need to coordinate efforts to control air pollution and respond to climate change. In terms of environmental protection, we will strengthen reform, innovation and basic capabilities, and set scientific goals, targets and key tasks in the 14th Five-Year Plan. We will do our best to accomplish the work next year and make a good start toward achieving the second centenary goal. Thank you.

Voice of Economy, China National Radio:

During the 13th Five-Year Plan period, China has made notable improvements to the environment. As a result, our people now enjoy more blue skies and white clouds. Could you please elaborate on the achievements made by our country in addressing air pollution during the 13th Five-Year Plan period? Thank you.

Zhao Yingmin:

Thank you for your question. Air pollution prevention and control has always been a big concern of society. It is also a priority in the tough battle against pollution, which is receiving the close attention of the CPC Central Committee and the State Council. Meanwhile, air quality improvement has been one of the most effective and successful parts of our campaigns in pollution prevention and control.

During the 13th Five-Year Plan period, the Ministry of Ecology and Environment (MEE) has worked together with relevant departments all over the country to fully implement the CPC Central Committee's decision and plan on the fight to keep our skies blue; it has taken decisive steps to ensure the achievement of our objectives. As a result, the air quality throughout the country has been notably improved. Major achievements were made in five aspects:

First, the eco-friendly transformation and upgrading of industrial structures have had substantive results. We cut about 200 million tons of overcapacity in the steel industry and eliminated 140 million tons of substandard steel capacity. By the end of 2019, the capacity of coal-burning power plants that had completed upgrades to achieve ultra-low emissions reached 890 gigawatts. Currently, about 610 million tons of crude steel capacity has been upgraded nationwide to achieve ultra-low emissions. After upgrading the thermal power industry to achieve ultra-low emissions, we are now actively advancing efforts towards ultra-low emissions in the steel industry. We also carried out special actions to review and reorganize more than 70,000 companies that were enlisted as small, poorly-managed, and heavily-polluting enterprises in 2018 and 2019 in 39 cities in the Beijing-Tianjin-Hebei region and surrounding areas and key areas in the Fenwei Plain region. We transferred the problems we found in the process to the local governments in a timely manner and urged them to rectify it.

Second, clean and low-carbon energy structure has been further improved. We concentrated resources to ensure the cleaner use of coal in non-industrial sectors in the Beijing-Tianjin-Hebei region and surrounding areas and the Fenwei Plain region, reducing non-centralized coal burning operations in more than 25 million households. We replaced the use of coal with cleaner energy over an area of 200,000 square kilometers south of Beijing. We provided guidance to the authorities in built-up city areas at the county level and above to help them to eliminate coal-fired boilers with a steam generating capacity of no more than 10 tons per hour. In the Beijing-Tianjin-Hebei region and surrounding areas, the Fenwei Plain region and the Yangtze River Delta, we eliminated coal-fired boilers with a steam generating capacity of no more than 35 tons per hour and upgraded coal-fired boilers with a steam generating capacity of no less than 65 tons per hour to achieve energy conservation and ultra-low emissions.

Third, the transportation system has become more eco-friendly. We stepped up efforts to construct special railway lines accessing major coastal ports and industrial and mining enterprises, thus raising the proportion of inland freight being carried by rail. Last year, China's railway cargo volume rose by 7.2% year on year. Starting from Jan. 1, 2019, we began to provide gasoline and diesel fuel that meets National-VI emission standards nationwide, thus unifying the use of automobile diesel fuels, general diesel fuels and some vessel fuels. The emission standards for general diesel fuels upgraded from National-IV to National-V and then to National-VI standards. We also implemented the National-VI emission standards nationwide for light-duty vehicles and actively promoted the wide use of clean energy vehicles. Since 2010, the number of new-energy automobiles on the roads has risen rapidly, with the proportion of electric buses among all public transport vehicles increasing from 20% in 2015 to the current 60%.

Fourth, pollution emanating from non-point sources has been effectively addressed. We developed a system to monitor dustfall in key regions and reported the dustfall of key cities every month. Last year, the average dustfall in the Beijing-Tianjin-Hebei region and surrounding areas, the Fenwei Plain region and the Yangtze River Delta were 7.5 tons, 6 tons and 4.4 tons per square kilometer, respectively, all meeting the goal. We also worked with other relevant departments to guide local governments to ban straw burning and promote recycling. Last year, the number of straw-burning sites nationwide decreased by 42% compared with that of 2015, according to satellite data.

Fifth, intra-regional prevention and control of air pollution has played an important role. We established a leading group to prevent and control air pollution in the Beijing-Tianjin-Hebei region and surrounding areas, as well as a collaborative group to address air pollution in the Fenwei Plain. We drew up and implemented action plans to comprehensively address air pollution in autumn and winter in the Beijing-Tianjin-Hebei region and surrounding areas, the Yangtze River Delta and the Fenwei Plain. We enhanced pollution treatment at key times and took targeted measures. In order to respond to heavy air pollution scientifically, precisely and effectively, in accordance with the law, we issued guidelines on strengthening heavy air pollution treatment and emergency emission reduction measures. By doing so, we adopted differentiated emission reduction measures based on performance in 39 key industries, curbing pollution in a targeted and scientific way.

Next, we will actively advance the structural upgrading of industry, energy, transportation, and land use; prioritize pollution treatment at key times, in key regions, in key industries to counter key pollutants; and pay special attention to strengthening the coordinated control of PM2.5 and ozone levels. We will also further define the key regions for air pollution treatment, enhance intra-regional prevention and control, and response to heavy air pollution. We will improve environmental monitoring, supervision and law enforcement. We will continuously widen the achievements of air pollution treatment and further improve air quality to provide our people with better and cleaner air. Thank you.

Southern Metropolis Daily:

China piloted an eco-compensation mechanism during the 13th Five-Year Plan period. With lessons learnt and problems identified, what will the country do under the 14th Five-Year Plan? Thank you.

Zhao Yingmin:

The eco-compensation mechanism is a very important initiative of institutional innovation. People have been quite concerned about how to share responsibilities through a market approach while advancing ecological conservation. We have achieved much through pilot programs during the 13th Five-Year Plan period. From now, we will sum up experiences and introduce the mechanism more widely. Particularly, we will motivate all parties along both upstream and downstream areas, left and right banks, and in the areas producing ecological products, and clarify each party's rights and responsibilities. Pursuing a holistic approach to conserving mountains, rivers, forests, farmlands, lakes, and grasslands in a coordinated way, we hope to realize joint protection and common development of all river basins through this mechanism.

www.dzwww.com:

Science and technology (S&T) innovation is the solution to prominent ecological challenges. Can you introduce some important research fruits in ecological S&T achieved during the 13th Five-Year Plan period? And what is the plan of the next five years? Thank you.

Zhao Yingmin:

Thanks for your questions. S&T indeed has become an important and effective means for improving the ecological environment, tackling climate changes, realizing green, low-carbon and high-quality development. 

In recent years, supported by the Ministry of Science and Technology and the Ministry of Finance, the Ministry of Ecology and Environment has been comprehensively implementing the decisions and deployments of the CPC Central Committee and the State Council and undertaking reforms in the S&T system. Through problem-oriented, demand-oriented, and result-oriented approaches, we have made major progress as follows:

First, major research projects have been advanced in an orderly way. Not long ago, I introduced the national research project on air pollution to the public, expounding reasons for the smog blanketing in the Beijing-Tianjin-Hebei region. This is an example of S&T supporting environmental protection. We have also launched major research projects on water pollution control and treatment. During the 13th Five-Year Plan period, the central government allocated more than 10 billion yuan of scientific and technological inputs in improving the ecological environment. 

Second, S&T system reform has proceeded in a smooth manner. To better delegate powers, streamline administration and optimize services, we have introduced a series of documents such as the guidelines on deepening reforms of the system for ecological and environmental S&T to boost innovation, and measures for implementing and deepening reforms of S&T project assessment, talent evaluation, and institutional assessment.

Third, S&T research fruits have been significantly applied and promoted.

Fourth, S&T research and application organizations have made fresh innovations. Under the model of "1 plus X", we have set up a national air pollution control and treatment joint research center, and national joint research center on protecting and restoring ecological environment of the Yangtze River, enabling about 8,000 S&T staff from more than 500 institutions to coordinate their research. Specialists in different fields from different departments and regions are brought together to form a high-level joint research team and play an important role in advancing ecological S&T.  

Thanks to the joint efforts of ecology S&T staff, our research during the 13th Five-Year Plan period has been fruitful. In the area of water environment, we achieved eight important fruits including the development and application of a whole process water pollution control system in key industries. We have also established three major technology systems to control and treat river basin pollution, manage the water environment in river basins, and guarantee the safety of drinking water, contributing to improvement of the water environment of the Taihu Lake, Beijing-Tianjin-Hebei region, Three Gorges Reservoir region, Huaihe River and Liaohe River, supporting key projects such as the South-to-North Water Diversion Project and providing high-quality water to the venues of Beijing International Horticultural Exposition and Beijing Winter Olympics. We have launched demonstration projects to remediate soil contaminated by heavy metals such as chromium and arsenic, providing strong S&T support for the improvements therein and also in people's living environment, as well as quality of agricultural products.

In ecological conservation, we have set up a technological system to draw red lines for protecting the ecosystems, contributing to the establishment of a nature reserve management system composed mainly of national parks. In solid waste, we have achieved breakthroughs in turning bulk industrial solid waste into building materials, waste-to-energy incineration technology, and hazard-free treatment of heavy metals, giving the building of waste-free cities a boost. To protect aquatic life, we have also issued the country's first criteria on cadmium and ammonia nitrogen levels in water bodies.  

To win the fight against pollution and serve high-quality economic development, we will focus our efforts on improving the ecological environment, enhance scientific, precise, lawful, systematic and smart pollution treatment, deepen reforms of the system for ecological and environmental S&T, speed up upgrading the ecological and environmental S&T innovation system in the new era, and ultimately empower the building of a beautiful China. Thank you.

Red Star News:

What progress has been made in regard to the rule of law on the environment? What measures will be taken in the future? Thank you. 

Zhao Yingmin:

Thank you for your question. In the 13th Five-Year Plan period, remarkable achievements have been made in terms of applying the rule of law, which is a very important aspect [when it comes to the protection of ecological environment]. In order to improve environmental quality and prevent water, air, soil and solid waste contamination, we have promoted a sound legal framework in regard to protection of the ecological environment; integrated the rule of law with various reforms; formulated and revised the ecological environment standards; promoted the reform of the compensation system on ecological environmental damage, and set up a sound legal framework to serve the cause of pollution prevention and control. The achievements can be seen in three aspects:

First, we have ramped up efforts to formulate and revise the laws regarding the ecological environment. Many laws and regulations on the protection of the ecological environment have been formulated and revised over the past five years, among them the Environmental Protection Tax Law, the Law on the Prevention and Control of Water Pollution, the Nuclear Safety Law, the Law on the Prevention and Control of Environmental Pollution by Solid Waste and the Biosecurity Law. Revisions to the Law on Prevention and Control of Pollution from Environmental Noise, the Marine Environment Protection Law and the Environmental Impact Assessment Law are still ongoing. The Standing Committee of the National People's Congress (NPC) is deliberating the draft law on Yangtze River conservation. 

Second, we have been improving the environmental standards and policy systems. We have formulated, revised and promulgated 551 national standards for ecological environment, including four environmental quality standards, 37 standards for pollutant discharge, eight basic environmental standards, 305 environmental monitoring standards and 197 technical regulations for environmental management. As many as 122 standards have been promulgated to serve the implementation of the "ten measures for air," 107 to serve the "ten measures of water," as well as 89 to serve the "ten measures of soil" (49 ones concerning soil and 40 concerning solid waste).

Third, achievements have been made in the reform of the compensation system on ecological environment damage. At the end of 2017, the General Office of the CPC Central Committee and the General Office of the State Council issued a reform plan for the ecological environment damage compensation system, to further reform the ecological environment damage compensation system in the pilots nationwide, with the environmental protection inspection being the new measure. Last year, the Supreme People's Court issued the Provisions on the Trial of Cases on Compensation for Damage to the Ecological Environment, and liability for damaging the ecological environment has also been codified in the Civil Code, which is an initial success for the ecological environment damage compensation system. A total of 1,674 cases related to environment damage compensation had been dealt with as of September. 

Next, we will continue to improve the legal framework for the protection of ecological environment by following the principle of coping with pollution in a targeted, scientific and law-based manner. We will establish a sound environmental standard system and an environmental technical management system. Moreover, we will also strictly implement the laws and regulations concerning environmental protection, so as to build new effective services and to ensure meeting new demands of ecological environmental protection. Thank you.

Bauhinia Magazine:

We are very concerned about the progress of the formulation of the plan for the protection of ecological environment in the Guangdong-Hong Kong-Macao Greater Bay Area. What measures will the Ministry of Ecology and Environment take to boost the protection of the ecological environment there? Thank you.

Zhao Yingmin:

The plan for the protection of ecological environment in the Guangdong-Hong Kong-Macao Greater Bay Area has been completed, and our future priority is implementation. Guangdong, Hong Kong and Macao should leverage their own strengths, take responsibility to protect the ecological environment, and work together, so as to contribute to high-quality development in the region. Thank you.

Shou Xiaoli: 

That ends today's press conference. Many thanks to Mr. Zhao as well as our media friends. Goodbye.

Translated and edited by Chen Chao, Wang Qian, Zhang Rui, Zhang Liying, Wang Yiming, Zhu Bochen, Yuan Fang, Xu Xiaoxuan, Zhang Junmian, Yan Xiaoqing, Wang Wei, Li Xiao, Huang Shan, Fan Junmei, Yang Xi, Gong Yingchun, Geoffrey Murray, David Ball, Laura Zheng, and Jay Birbeck. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.