Xinhua News Agency:
In the past five years, there have been some voices wondering if China's economy will suffer a hard landing. But in fact, China's economy has maintained stability while making steady progress and outperformed other major economies. You are the head of the country's macroeconomic regulator - why do you think China's economy can make it? Based on growth figures in the first three quarters, many media outlets and organizations noted that China's economy is clearly stabilizing. Some even believe that the new cycle for economic growth has already come. What is your opinion of that? Thank you.
He Lifeng:
Thank you. Since 2012, the global economic recovery has struggled to take effect while China's economy has maintained stability and made steady progress. "Stability" can be seen in the following aspects:
First, major economic indicators are stable. From 2013 to 2016, China's economy grew at an average rate of 7.2 percent, and the rate for the first quarter, first half as well as the first three quarters of this year are all 6.9 percent. The country's economic volume has grown from 54 trillion yuan in 2012 to 74.4 trillion yuan in 2016. If this trend continues, that number would surpass 80 trillion yuan. That's an increase of over 20 trillion yuan in five years, which would mean there was an average growth of 4 to 5 trillion yuan every year. This year, the increase may be over 6 trillion yuan, which is equal to the economic volume of a medium-sized developed country of about US$800 billion to US$900 billion. That is not easy. Although China's economy has shifted from a high speed to a medium-to-high speed of growth, the country's economic volume has been constantly expanding at a relatively large margin.
Second, prices remain stable. In recent years, price increases averaged at about 2 percent, with the highest rate at 2.6 percent and the lowest at 1.4 percent. In particular, the prices for agricultural by-products remain stable, which has delivered tangible benefits to the general public. Stable prices have created a desirable environment and conditions for development.
Third, employment is stable. Job growth reached 13 million additional positions in 2013 from 12.6 million in 2012 and the number remained over 13 million in the following years. Like I just mentioned, job growth this year reached 10.97 million by September, so the number is expected to reach 13 million by the end of this year. Without stable and healthy economic growth, an increase of 65 million positions in five years would not have been possible.
Fourth, poverty reduction is progressing in a stable manner. Every year, over 10 million people are lifted out of impoverishment in China. The poverty rate is expected to be reduced to less than 4 percent by the end of this year. While there is still much work to be done, lifting over 60 million people out of poverty in a steady manner in the course of five years is indeed a huge achievement. One does not realize the difficulty of an undertaking until one has experienced it oneself. We have made strenuous efforts in this process.
"Progress" can be seen in the following aspects.
First, we have been progressing with institutional reform. As General Secretary Xi Jinping pointed out in his report, over 1,500 reform measures were implemented to deal with difficult issues and the results are better than expected.
Second, we have made steady progress in cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness. In our drive to promote economic restructuring and industrial transformation and upgrading, we have steadily cut overcapacity in steel and coal while employing market-oriented and law-based measures in the industries. Up to this point, we have cut over 100 million tons of steel capacity, 400 million tons of coal capacity, and resettled over 1 million workers laid off from the move. That is not easy. And we have also made significant progress in reducing excess inventory, deleveraging and strengthening areas of weakness.
Third, we have made marked progress in economic transformation and upgrading. Traditional industries have undergone complete and rapid transformations in technology, products as well as research and development and are burgeoning with vitality. New forms of business, like car hailing and bike sharing, are in full swing, while business models that are combined with e-commerce and electronic data keep sprouting up. During the past National Day Holiday, Chinese tourists were reportedly not accustomed to life abroad as they could not pay for tickets, hotels and food using mobile payments. This shows that these new forms of business have made people's lives significantly easier and improved their livelihoods. New industries keep sprouting up. According to some authoritative media reports, the number of Chinese tech "unicorns" has reached 90, accounting for one-third of the world's total and only slightly less than the number present in the countries with the most. This means that China's new high-tech industries and enterprises are burgeoning and the country's business climate for medium and small businesses has greatly improved, which have paved a solid foundation for steady, healthy and sustainable economic development in the future.
All the above demonstrate China's sustainable and healthy economic development in the past five years. What are these achievements attributable to? The report to the 19th CPC National Congress has given the answer. First, it is because of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core. Second, it is because of the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, which is the latest achievement in adapting Marxist political economy to the Chinese context and has been greatly employed in real practice.
Third, it is attributable to the strong and superior socialist system that is able to mobilize both resources and power to tackle difficult issues. Some huge projects that we have always wanted to but were unable to finish have been completed. That is quite remarkable.
Fourth, CPC committees and governments at all levels have a strong capacity to get things done through, in my opinion, mobilized efforts and policy implementations. This has motivated tens of millions of entrepreneurs and has been driving China's socioeconomic development forward. We are fully confident in our future.
Hong Kong Ta Kung Wen Wei Media Group:
Just now Mr. He mentioned that the report delivered at the 19th CPC National Congress offered a very significant assessment of the principal contradiction facing Chinese society. I'd like to ask how we should understand this assessment, and, at the same time, how can the new contradiction be resolved. Thank you.
He Lifeng:
Thanks. In the report delivered at the 19th CPC National Congress, General Secretary Xi Jinping offered a significant political assessment that socialism with Chinese characteristics has entered a new era, and, correspondingly, the principal contradiction facing Chinese society has evolved accordingly. It means that what we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. This evolution represents an overall and historical shift that creates many new demands for the work of both the Party and the country. We are now studying earnestly and gaining a good grasp of the essence of the report delivered at the 19th CPC National Congress. We need to make a profound analysis of how the principal contradiction faced by Chinese society evolves in different periods and at different developmental stages.
In his report, General Secretary Xi Jinping gave a detailed explanation of the six major problems and contradictions identified in regard to the country's unbalanced and inadequate development. These involve the economy, people's livelihood, social governance, as well as other important aspects. In terms of the economy, he pointed out the problems caused by unbalanced and inadequate development that are awaiting our solution, including the fact that China's ability to innovate needs to be stronger, the real economy must be improved and we have a long way to go in protecting the environment.
We need to focus on these problems that have involved different forms of expression in different periods and developmental stages, make an in-depth study of the true causes, offer prompt countermeasures and solutions and resolve the problems one by one through practicable implementation of the chosen measures. We believe that the resolution of these problems will definitely promote economic development, meet the people's ever-growing needs for a better life in different periods and at different stages of national advance, and achieve better quality, more efficient, fairer and more sustainable development. Thanks.
China Global Television Network (CGTN):
My question is about the coordinated development of the Beijing-Tianjin-Hebei region. We know the Xiongan New Area was formally set up last April, and the Beijing Urban Master Plan (2016-2035) was officially published recently. So, what is the latest situation with the construction of Xiongan New Area and sub-center of Beijing? We have noticed that new plans have been drawn up to guide the coordinated development of Beijing-Tianjin-Hebei region. So, what's the next big move in the development?
He Lifeng:
I would like to answer your latter question first, since the Xiongan New Area and Beijing's new administrative center are important parts of the coordinated development of the Beijing-Tianjin-Hebei region.
General Secretary Xi Jinping put forward the concept of coordinated development of the Beijing-Tianjin-Hebei region in 2013. And the meeting of major Party and government leaders of Beijing, Tianjin and Hebei was held to identify the concept as an important strategy of national development on Feb. 26, 2014. Since then, the strategy has been implemented in an effective and orderly way, especially in three major areas. In terms of transportation, we have extended incomplete national expressways and improved bottleneck sections of national highways, with a combined length of 800 kilometers. In terms of industrial upgrading and transfer, we transferred a batch of quality enterprises not suited to Beijing's future development, that is, not related to the capital function, to Tianjin and Hebei for a better coordinated development. In terms of ecological and environmental protection, we have achieved great development in landscaping and forestation around Beijing. While restricting less efficient, dispersed coal operations, we are striving to make the sky over China blue once again. In addition to the three aspects I have already mentioned, we have also worked to improve people's livelihood and quality of life, including education, medical and health care. So, the achievements we have made in developing the Beijing-Tianjin-Hebei region indeed have exceeded our projections.
To phase out Beijing's non-capital functions is a major part of developing the Beijing-Tianjin-Hebei region. The CPC Central Committee and the State Council approved the Beijing Urban Master Plan recently. The sub-center of Beijing is located in Tongzhou. Under the plan, Tongzhou and areas in southeast Beijing, such as the three counties in northern Langfang, Beijing's new airport and Zhuozhou are being developed in an orderly and effective way.
Over the years, the construction of major buildings in the administrative office area has been basically finished. According to the plan, Beijing municipal institutions and administrative departments will initially take steps to move by the end of this year, sending a strong signal to the public that the phasing out of Beijing's non-capital functions has taken a big step forward.
As a vital part of developing the Beijing-Tianjin-Hebei region and also the major carrier in taking over Beijing's non-capital functions, the establishment of the Xiongan New Area was announced by the CPC Central Committee and the State Council on Apr.1, 2017. Located 30 kilometers from Baoding, the Xiongan New Area will span Xiongxian, Anxin and Rongcheng counties, totaling an area of about 2,000 square kilometers. The first phase of new area development will cover around 20 to 30 square kilometers and be expanded to 100 square kilometers fairly quickly. The great achievements we made in planning and constructing the new area in the last months are as follows:
Firstly, we establish the effective and efficient working committee and management committee to carry out developments in the Xiongan New Area.
Secondly, we have established 12 teams, including 300 experts from both home and abroad. The urban design for the new area must adhere to the requirement of "world view, international standards, Chinese characteristics and high-level positioning". The plan, as I understand, has entered a crucial stage of revision and modification.
Thirdly, we have developed the necessary policy framework for the Xiongan New Area. It has been worked on by the NDRC and relevant departments in Hebei Province, and will be issued together with the Xiongan New Area Master Plan.
Fourthly, based on the current situation, the projects not in conflict with the plan of Xiongan New Area have already been carried out in an orderly way, such as large-scale afforestation and development of the Beijing-Xiongan high-speed railway. Thanks.
Xinhua News Network:
My question is about China's economic development model. China's economic development has achieved great success in recent years and been recognized by the international community, especially by developing countries. Do you think China's model is worth learning by other countries?
Ning Jizhe:
Just as Mr. He explained, over the past five years, China's economic development has again made new and significant achievements on the basis of its reform and opening up beginning more than 30 years ago. These achievements were reached under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, by adhering to the socialism with Chinese characteristics and taking the road of socialism with Chinese characteristics. In the nearly four decades since the reform and opening up, we have gone from a planned economy to a planned commodity economy, to a planned market economy and then to the socialist market economy, which have greatly liberated and developed productivity. At the same time, we have expanded the opening up to the outside world and carried out mutually beneficial exchanges with other countries. We have also adopted a series of policies and measures in line with China's national conditions, greatly promoting the enthusiasm, initiative and creativity of hundreds of millions of people to develop the economy and improve their livelihoods.
In his report delivered at the 19th CPC National Congress, General Secretary Xi Jinping made a scientific summary of the basic strategy of socialism with Chinese characteristics for a new era. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will do a better job and further expand our opening up to achieve peaceful development, mutual benefit and win-win results with other countries.
The current trend of the whole world is still political multi-polarization, economic globalization, cultural diversity and social informatization, which has not changed. Countries have their own national conditions and culture, so seeking economic development and an improvement of people's livelihoods according to their own national conditions is a shared interest globally.
Socialism with Chinese characteristics is pursued by China based on its own national conditions. It has provided a Chinese solution for the world and for other countries to develop their economies and improve people's livelihoods. Some developing countries can use it as a reference when moving forward from a low-income country to a middle-income one. General Secretary Xi Jinping in his report also proposed building a community for the shared future of mankind. We believe that all countries in the world can learn from each other in their mutual cooperation and development. We would also like to introduce some experiences and practices of China in its development. Thank you.
China.org.cn:
Seen from figures for the first three quarters of this year, China's current investment growth is sluggish. Many market entities have pointed out the lack of a strong desire by private businesses to invest. I would like to know the views of the three officials present today on this. Will there be new measures adopted after the 19th CPC National Congress to encourage investment by the private sector, shore up their confidence and stimulate their vitality? Thank you.
Zhang Yong:
Thanks for your question. Fixed asset investment plays an important role in China's economic growth. I've read some statistics which show that over 700 million Chinese travelled during the eight-day National Day holiday. So many people traveling concurrently within such a short period of time is made possible by China's more than 20,000 kilometers of high-speed railways in operation as an infrastructure guarantee. This is an example of the important role fixed asset investment has played in China's economic growth for more than thirty years of reform and opening up.
Fixed asset investment amounted to 45.85 trillion yuan in the first nine months of this year, up 7.5 percent year-on-year. This is a growth rate 0.3 percentage points lower than that for the first eight months of the year, but the fall in the growth rate is already 0.2 percentage points lower than the fall when comparing the figure for the first eight months of the year with that for the first seven months of the year. Of all the fixed asset investment, infrastructure investment still grew steadily and rapidly and real estate investment grew relatively steadily. Impressively, investment in high-tech manufacturing and technological transformation expanded rapidly, though private investment and the overall investment in manufacturing declined.
You mentioned in your question that investment growth is sluggish, but I think there are two sides to every coin. After over thirty years of massive construction, China's infrastructure has improved significantly, so the high growth rate of over 20 percent or 10 percent seen in the past, I think, will now be followed by a relatively medium-high growth rate. If you pay attention, you may notice that in the past when you visited a city, you saw tower cranes everywhere. I once visited a provincial capital where tower cranes were seen everywhere and a local official, when asked, told me that the total number of tower cranes then being used in the city was 10,000, which was higher than the aggregate number of many countries.
But now when we visit a city, especially a medium- or big-sized one, you can rarely see such a sight, which shows that massive infrastructure construction was already done well. Meanwhile, China's investment structure has improved as a result of its efforts to boost investment where it is unduly low, especially evidenced by the rapid development of the high-tech industry. The report delivered by General Secretary Xi Jinping at the opening of the 19th CPC Congress has highlighted a number of major advances in science and technology, such as the successful launch of the Tiangong-2 spacelab, the commissioning of the deep-sea manned submersible Jiaolong and the test flight of airliner C919. In addition, China has overcome one difficulty after another to achieve intellectual property rights for high-speed railways. On the whole, fixed asset investment has remained within a reasonable range of growth, but many problems do still exist. For example, government investment is not as effective and targeted as it should be; private investment still faces barriers in terms of market access; the public-private partnership (PPP) needs to be further facilitated; and reform of the investment and financing systems needs to go deeper. These are all problems in need of greater efforts to be addressed.
This is why General Secretary Xi Jinping in his report at the Congress specifically called for deepening the reform of the investment and financing systems so that investment can play a critical role in optimizing the supply structure. We will follow the guiding principles of the Congress, adopt a problem-oriented approach and further give rein to the important role of investment in stimulating economic growth.
Private investment has always been an issue of high public attention. China's private investment has arguably seen rapid development and played an important role in the national economy, especially since China started the drive of reform and opening up. Over the past five years, the proportion of private investment in the total fixed asset investment remains steady at over 60 percent, with the highest being 65.4 percent. The proportion narrowed down to roughly 60.5 percent for the first nine months of the year. The private sector contributed 80 percent of China's employment, 60 percent of China's GDP and 50 percent of China's tax revenue. Moreover, currently 70 percent of China's outbound investment comes from private businesses. Therefore, private businesses have become a very important component of the national economy. The slower growth seen in private investment, I think, is to a certain degree linked to the slower growth in China's overall investment we mentioned just now. But there are private sector-specific reasons. Private investment is concentrated in manufacturing and real estate and those two industries are undergoing relatively weak growth as manufacturing is transforming and upgrading and real estate is cutting excess inventory and suffering from tightened control over land supply. Therefore, the relatively weak growth of the two industries is an objective result.
However, private investment was steady and sustained on the whole. In the first nine months of this year, private investment grew 6 percent, 3.5 percentage points higher over the same period last year. The numbers were even lower at 2.1 percent for the first seven and eight months of 2016. The latest 6 percent is, I would say, a sign of stabilization.
Yes, the report delivered at the opening of the Congress said China will support private businesses and stimulate the vitality of various market entities, so further promoting private investment is a focus of our work. We will especially focus on solving the following problems, as they are most complained about.
First, areas off limits to private investment, or in other words market access. We will continue to streamline administration and delegate powers to further lower the threshold for market access, with special attention given to making a negative list so that the market becomes more transparent and private businesses are more empowered to make independent decisions.
Second, a lack of desire to invest by the private sector. We are now working with relevant departments to speed up the establishment of a government information platform, especially a creditability system. The government should as well be credible and abide by the contracts it has signed to protect the legitimate rights and interests of private businesses.
Third, a lack of courage to invest. We will intensify oversight to find out why private businesses are afraid to invest and correspond accordingly. We will also protect intellectual property rights and incubate entrepreneurs.
Last, where to invest. Why is investment in manufacturing experiencing relatively slow growth? The reason is that the industry is transforming and we need to find new growth points. I think the government should undertake the responsibility to guide through policy and channel private investment into fields where the industrial chain is long and outlook is rosy.
Economic Herald from Hong Kong:
The Guangdong-Hong Kong-Macao Greater Bay Area has become a focus of public concern since the national strategy was proposed. What does it mean for the development of Hong Kong and Macao? In addition, economic growth in the greater bay area remains unbalanced and the political and economic systems somewhat complicated and diversified. How will the central government deal with these problems?
He Lifeng:
Thank you. General Secretary Xi Jinping pointed out in his report at the opening of the 19th CPC National Congress that the development of Hong Kong and Macao is closely tied up with that of the mainland. On July 1, he witnessed the event when the National Development and Reform Commission (NDRC), the People's Government of Guangdong Province, the Government of the Hong Kong Special Administrative Region and the Government of the Macao Special Administrative Region jointly signed a framework agreement for constructing the Guangdong-Hong Kong-Macao Greater Bay Area. These were among a series of activities held to celebrate the 20th anniversary of Hong Kong's return to the motherland. In my view, promoting construction of the Guangdong-Hong Kong-Macao Greater Bay Area has great significance.
First, its construction will help advance the integration of Hong Kong and Macao into the country's overall development and promote better growth of Hong Kong, Macao, Guangdong Province and especially the Pearl River Delta region, so as to provide more benefits for Hong Kong and Macao people, and improve economic competitiveness and the level of public services in the Pearl River Delta region.
Second, the Guangdong-Hong Kong-Macao Greater Bay Area comprises nine cities in Guangdong, including Guangzhou, Shenzhen, Dongguan, and Zhuhai, together with Hong Kong and Macao. It covers an area of 56,000 square kilometers with a population of more than 68 million. Last year, its aggregate economic output approached 10 trillion yuan, roughly equivalent to US$1.4 trillion. The amount matches world-renowned bay areas, such as the Tokyo Bay, the San Francisco Bay and the New York Bay areas. Through its construction, we aim to build a world-class urban agglomeration, where "nine plus two" can add up to more than eleven and even produce a multiplier effect considering its economic scale and aggregate economic output implying rich human resources and a solid material foundation with a well-developed transportation network and close interaction with other economies at home and abroad. Therefore, it has bright prospects as the member cities leverage their comparative strengths to promote construction.
Since the framework agreement was signed on July 1, construction has achieved substantial strides. On the one hand, the NDRC, together with related government departments and Guangdong Province, Hong Kong and Macao, have worked to speed up planning for the area. The plan will provide a guideline, or a blueprint, for its construction in future. We are now soliciting opinions on the initial draft of the plan.
We are also promoting technological innovation that is reconcilable with the plan. Shenzhen, Guangzhou and other cities in the Pearl River Delta region have had close connections with Hong Kong and Macao before in economy and technological cooperation in such fields as unmanned aerial vehicles, electronic information and new forms of business, all of which have a good foundation. Thus, on the former basis, they are carrying out the contents of the framework agreement so as to turn them into specific projects through active communication and consultation. The work is already starting to produce good results.
In my view, as the process is being accelerated, the bay area will become an important international center for scientific and technological innovation. What's more, the area is vast and has plenty of room to grow, and the same applies to its surrounding area. The cycle of developing, manufacturing and marketing will gain rapid progress. We have full confidence the area will become a new economic growth pole for China's future development through technological and institutional innovation. Its growth speed and quality, efficiency, fairness and sustainability during the development will all be of a most advanced nature.
As for internal interconnection, more efforts are now being made to link up waterways, electrical engineering and especially transportation in addition to communications. Work is being accelerated for construction of the well-known Hong Kong-Zhuhai-Macao Bridge. Based on the current progress, it is expected to open to traffic by the end of this year. Besides, we are mulling policies to facilitate various other forms of contact, that is, how to facilitate the movements of personnel, funds and other market elements. We are working on related policies such as those related to customs and other aspects.
I believe that, as we have a clear direction, and the report to the 19th CPC National Congress has put forward clear requirements, joint efforts at the national level, Guangdong Province, Hong Kong and Macao will coincide to create a better future for the Guangdong-Hong Kong-Macao Greater Bay Area. Thank you.
People's Railway Daily:
Since the 18th CPC National Congress, China's high-speed railway development has made great achievements, with both the scale and speed of high-speed railway networks ranking first in the world now. My question is for the National Development and Reform Commission. Do you have any specific plans and measures for the future development of the high-speed railway in our country? Thanks.
He Lifeng:
As you said just now, the total length of China's high-speed railway now ranks first in the world, exceeding 22,000 kilometers. Correspondingly, the complete set of equipment for the country's high-speed railway, including roadbeds, rails, locomotives and carriages, as well as the overall operation management have also reached an advanced world-class level. The point here is that, in future development, we will continue to push it forward as an important project in the industry. Currently, we are working with the Ministry of Transport and the China Railway (CR) to make an in-depth study of specific policies in this regard. It is estimated that an additional number of high-speed railways will be under construction and open to traffic every year in the future so as to better meet the needs of the people and better serve the passengers.
While answering related questions just now, Mr. Zhang Yong said that the number of Chinese people traveling during the National Day holidays this year exceeded 700 million, which is an unimaginable figure anywhere in the world. The average daily volume of high-speed railway passengers during this period exceeded 15 million, which is also an unimaginable figure for any country in the world. Therefore, to strengthen areas of weakness and meet objective needs, we will pay more attention to the construction of high-speed railways in our next step. With the implementation of the country's Belt and Road Initiative at the same time, we will consult with the countries along the Belt and Road on the technology, standards and equipment of high-speed railways so as to meet the different needs of different countries, promote the building of a community of a shared future for mankind, and bring benefits to the countries and the peoples along the Belt and Road. Thank you.
Reuters:
To what extent will China's efforts to combat smog this winter affect economic growth in the fourth quarter of this year and the first quarter of next year? Thank you.
Zhang Yong:
The central government attaches great importance to improving the environment and has issued action plans on prevention and control of air, water and soil pollution in the past five years. Curbing air pollution is one of the people's aspirations. General Secretary Xi Jinping reaffirmed in his speeches on ecological conservation that the environment is the people's livelihood, green mountains are beautiful, and blue skies provide happiness. Our development concept, or the idea of development, is to focus on the people. Therefore, the governance of air pollution is a priority. The Ministry of Environmental Protection and other departments are working together to push forward this fight.
Great progress has been made in curbing pollution and reducing emissions in the past five years. Per unit of GDP energy consumption has dropped by 20.9 percent, and carbon dioxide emissions have also kept falling. The energy conserved is equivalent to over one billion tons of standard coal. But our efforts still need to be intensified. In the fight against pollution, some restrictions have to be placed on high-pollution enterprises, thus affecting their performance and profit to some extent.
However, these restrictions are essential to the overall ecological conservation of the country, and will not have a great effect on China's economy. We have strengthened rectification of power plants and other high-pollution enterprises. We have set obligatory targets for all provinces and evaluated them each year. As a result, power plants and other high-polluting enterprises are equipped with more advanced technologies to reduce pollution. With our intensified efforts, we can enjoy more days with "blue skies" in the future. Actually, the construction of ecological progress will play a positive role in the development of economy.
China News Service and Chinanews.com:
According to some reports, certain foreign investments are withdrawing from the Chinese market, as some foreign-invested enterprises have complained about the changing business climate in China. What are your views about the issue? Are we tightening our control over outbound investment? Are there any measures taken to promote international cooperation on production capacity with win-win outcomes? Thanks.
Ning Jizhe:
Well, the questions you have asked concern three different aspects - the use of foreign investment, outbound investment and international cooperation on production capacity. All of these relate to the issue of opening up, an important obligation of the NDRC. First of all, I need to say that the CPC Central Committee with Comrade Xi Jinping at its core has laid considerable emphasis on opening up. Last July, General Secretary Xi Jinping chaired a meeting of the Central Leading Group for Financial and Economic Affairs, urging the country to improveits investment and market environment and accelerate opening up to the outside world. Fundamentally speaking, the investment environment in China has been continuously improved in the past few years, and the opening-up policy in China will not change. According to the report to the 19th CPC National Congress, China will not close its door to the world; it will only become more and more open, with more inclusive, fairer and easier access to the use of foreign capital.
In recent years, China continues to be the leading destination for foreign direct investment. In the first nine months of this year, foreign investment utilization in China hit US$92.1 billion, maintaining a high momentum. However, we still need to place more importance on improvement of the business environment, as there are still some problems and difficulties in the development of foreign-invested companies.
This year, the State Council issued two special documents focusing on the use of foreign investment. One is "Measures to Expand Opening up and Actively Use Foreign Capital" and the other is "Measures to Promote the Growth of Foreign Investment."Issuing two documents on foreign investment utilization within one year fully demonstrates the central government's firm resolve to improve the environment for foreign investment.
In the ensuing years, China will implement the system of pre-establishment national treatment plus a negative list across the board and significantly ease market access in a bid to create a better business climate. In terms of fair competition, we will also give equal national treatment to foreign-invested enterprises after they make investments. All businesses registered in China will be treated equally. In order to facilitate investment, we keep managing foreign investments mainly on a record-keeping basis. So far, more than 96 percent of the foreign investments have been managed this way. Besides, we are still seeking to deepen the reform in some areas to further improve investment facilitation in a holistic manner. I believe, through such efforts, China can definitely create a fairer, more reasonable and more efficient environment for businesses and their investments.
China has always given equal access to "bringing in" and "going global," supporting qualified domestic companies to "go global" for win-win cooperation. This strategy has never been changed. By the end of 2016, our total outbound investment amounted toUS$1.36 trillion and the number of enterprises established in overseas markets reached 37,200. In 2016, the country's outbound investment totaled US$196.2 billion. China became the world's second biggest investor, and its related stock ranked sixth. The report to the 19thCPC National Congress has also stipulated that we will develop new ways of making outbound investments and form globally-oriented networks of trade, investment and financing, production and services. However, there are still some problems with outbound investments. We need to guide enterprises to invest abroad in accordance with local laws and regulations. We are also considering to issue laws to regulate outbound investments, ensuring they can obtain sustainable and sound development. In the first three quarters of this year, China's non-financial outbound investment reached US$78 billion, showing an improving structure with no new projects reported in property, sport and entertainment.
Last but not least, we will comply with the requirements stipulated in the report to the 19th CPC National Congress to promote international cooperation on production capacity. With enterprises taking the leading role, we will take a market-oriented approach, follow the international norms and the guidelines of the government and make full use of the advantages of various countries to achieve mutual benefit and win-win outcomes. We seek to better facilitate international cooperation on production capacity in the following aspects.
First, we'll improve the safeguard mechanism. We have so far launched production capacity and investment cooperation mechanisms with 36 countries. The number will keep increasing and the mechanisms continue to be improved. We have set up third-party cooperation mechanisms with developed countries such as France and Germany, and launched multilateral cooperation on production capacity with regional organizations like ASEAN. We plan to further our endeavors on such a basis to help our enterprises to better target overseas demand while launching projects.
Second, we seek to innovate our services. We are promoting investment and fundraising innovation and internationalization, and giving full play to financial platforms, such as the funds for production capacity cooperation, to create an investor-friendly environment.
Third, we intend to provide more guidance and regulations. We encourage enterprises to actively participate in the Belt and Road Initiative as well as international cooperation on production capacity, guiding them to immerse themselves in both the global industrial and value chains, obey the laws and rules of the target country, fulfill their obligations, increase risk awareness and realize mutual benefit and win-win outcomes.
To add one more point, we need to ensure the implementation of cooperation projects. We will enhance communication with pertinent countries, implementing relevant cooperation projects and improving the multi-party collaboration platform. We are pressing ahead with negotiations of relative protocols in a bid to achieve notable progress in the early phase and deliver the benefits to the peoples involved. Thank you for your questions.
Economic Daily:
In recent years, the real economy, in particular the manufacturing sector, has been faced with downward pressures and difficulties. To make the situation even worse, a substantial amount of funds have been drawn from the real economy, adding to the pressure. Can you help us understand the current situation, whereby investment has been diverted out of the real economy? What measures will be taken to solve the problem? Thank you.
Zhang Yong:
Thank you for the question. The situation you described is true to some extent. In recent years, due to the global financial crisis, both domestic and international markets have been sluggish. The real economy's profitability has dropped, with nongovernmental capital and enterprises shifting to other sectors. This is a bane on structural adjustment, transformation, upgrading and innovation-driven development of the real economy.
But it's natural for enterprises to shift to sectors with greater profitability. Now that the virtual economy is seeing higher profits, it's natural that enterprises place greater emphasis on this sector.
But I'd like to assure you that from the overall perspective, the real economy still maintains sustainable and stable momentum, despite the shifts towards the virtual sector.
In the report delivered to the 19th CPC National Congress, General Secretary Xi placed particular emphasis on developing a modernized economy. He said that we must focus on the real economy, give priority to improving the quality of the supply system, and enhance our economy's strength in terms of quality. This is the action guide for our work in the next step. We will guide nongovernmental capital to go to the real economy, because the real economy has been the foundation of all of our economic achievements.
In recent years, we have taken revitalizing the real economy as a major task in the supply-side structural reform. We have achieved notable outcomes, such as upgrading the industrial structure, reboosting the manufacturing sector, and stabilizing market expectations.
The commissioning of the deep-sea manned submersible Jiaolong, the test flight of the airliner C919, and other scientific and technological achievements mentioned in General Secretary Xi's report are all the results pulled off by various departments and regions' effective implementation of the CPC Central Committee's plans on reviving the real economy and deepening the supply-side structural reform.
Yet, we still have to put the real economy as the top priority, seek to solve problems, and focus on addressing issues like low profitability of investments and the poor quality of supply.
Under the guiding principles of the 19th CPC National Congress, we will take measures in the following fields:
First, we will strengthen areas of weakness, and increase effective supply. We should focus on both the "software" and the "hardware." "Hardware" refers to accelerating the development of emerging industries and advanced manufacturing industries. "Software" refers to strengthening the construction of various certification, accreditation, standardization and other systems.
Second, we will further streamline administration procedures and delegate more power to lower-level governments to relieve the pressures on enterprises. This year, the State Council has made a dedicated effort to cut taxes and fees by 1 trillion yuan. The aim is to stimulate enterprises' development, strike a balance between the role of government and that of the market, and make enterprises willing to engage in the real economy under the current market situation.
Third, we will implement the strategy of innovation-driven development, and shift to new driving forces of growth. Innovation is the primary driving force for development. We should foster an environment in favor of innovation, and increase innovation's contribution to the real economy's growth. The campaign of mass entrepreneurship and innovation has been in full swing. Many of you might have visited startup business parks, which are found all over the country, and have attracted many college graduates and returning migrant workers seeking new jobs at home. We will give more support to this field.
Fourth, we will cut overcapacity, and improve the allocation of inventories. Just now, Mr. He talked about the steel sector. The previous large-scale investments helped solve many long-term problems, such as poor roads, poor transportation, and low productivity, but it also caused new problems, such as overcapacity in the coal and steel sectors. To solve this problem, to improve the allocation of inventories, and to increase the efficiency of allocation, we need to adopt market-based and law-based operations.
Last, we will improve the service system, including financial services and government services, to support the real economy, facilitate the real economy's development, and make its development more efficient, thus laying a more solid foundation for China's economic and social development.
Guo Weimin:
This ends today's press conference. Thank you.
