In the latest reshuffle of Chinese government institutions, a new Immigration Bureau under the Ministry of Public Security will be set up to handle visas, repatriation of people found to be in the country illegally, and border control. It will also provide exit and entry services for Chinese nationals. The move comes as more foreigners are entering China, both legally and illegally, and more Chinese are emigrating, or acquire a second nationality, which is still illegal in China.

The Ministry of Science and Technology will take over the State Administration of Foreign Experts Affairs, which handles employment of foreign experts. The government is also taking additional measures to attract more skilled foreigners to China for work – efforts that are often undermined by red tape, particularly the complicated visa application process.

“Along with the rise of China’s power, an increasing number of foreigners have come to work and live in this country, which means better immigration services are needed,” State Councillor Wang Yong told more than 2,900 lawmakers at the Great Hall of the People in Beijing. There were more than 900,000 foreigners working in mainland China in 2016, according to official data, compared with only 10,000 in the 1980s. China meanwhile granted permanent residency to 1,576 foreigners in 2016 – a 163% jump from the previous year – under a “green card” scheme that began in 2004. The number of Chinese going to live in other countries is also on the rise, going from 4.1 million in 1990 to 9.3 million in 2013, according to the United Nations Department of Economic and Social Affairs.

Wang Huiyao, Director of the Center for China and Globalization, a think tank in Beijing, said it was high time an immigration bureau was set up. “With so many departments involved and a complicated application process, moving to China can be a real headache for foreigners and the bureaucracy has also put off international talent from coming here,” Wang said, adding that a central agency could provide a better service and more welcoming atmosphere.

Dou Xiankang, President of Wuhan University and an NPC Deputy submitted a proposal to improve the pension system for top overseas talent in China.

China has pledged to accelerate its efforts to surpass the U.S. in advanced technologies from artificial intelligence (AI) to robotics by wooing overseas talent and venture capital investment. The government will do more to implement its innovation-driven development strategy to make the country more “innovative and competitive”, Premier Li Keqiang said in his annual report at the National People’s Congress (NPC), where he laid out the priorities for 2018. The tech-related initiatives include bringing in overseas talent and more tax incentives for venture capital investment. Li mentioned the terms “Internet Plus” – the strategy of harnessing the internet to upgrade the country’s economy – and “innovation” several times during his speech. “The latest global revolution in science and technology and industrial transformation are trends we must be on board with”, he said.

The pledge comes amid China’s renewed efforts to transform itself from the factory floor of the world into a global innovation powerhouse and echoes President Xi Jinping at the 19th Communist Party Congress, where he listed the internet, big data and AI in his keynote address. China has set itself a target to become a worldwide AI leader by 2030. “In the global race of scientific and technological innovation, China has shifted place, from following others to keeping pace and even leading the pack in more areas,” said Premier Li. In his report, Li listed “high-speed rail, e-commerce, mobile payments and the sharing economy’” as areas in which China is leading the world; and “manned space flight, deepwater exploration, quantum communication, and large aircraft development” where China has made breakthroughs in innovation.

Backed by profits from a huge domestic market and more than 700 million internet users, China’s leading tech companies are expanding overseas, where they are competing with global market leaders for market share and influence. Baidu and Didi Chuxing are competing with the likes of Google’s Waywo and Uber Technologies, while Tencent Holdings and Alibaba Group Holding have been expanding their services outside China. To spur innovation, China will make more effort in encouraging overseas Chinese students to return after completing their studies, while creating a fast track program to attract more foreign talent to China, Li said. “We have no doubt that by bringing together myriad intellects and pooling everyone’s energies, China will break into a sprint innovation”, he said. The government will also support efforts by leading innovative enterprises to go public and extending pilot preferential tax policies for venture capital investment and angel investment, the South China Morning Post reports.

Over the past five years, China’s investment in research and development (R&D) has grown at an average annual rate of 11%. The contribution of technological advances to economic growth has risen from 52.2% to 57.5%, according to the government work report.

Latest developments: The National People’s Congress (NPC) voted on March 11 to scrap the two-term limit for the President and Vice President, clearing the way for President Xi Jinping stay on the job for a third term starting in 2023. The legislature also agreed to set up a National Supervisory Commission at the national and local levels to combat corruption. It will have jurisdiction over all public sector employees and report to the NPC.

Members of the NPC and CPPCC continued their discussions on economic policy. China will push high-quality economic growth this year and will have a greater tolerance for a slower growth rate, CPPCC members said. Yang Weimin, Deputy Director of the Office of the Central Leading Group on Financial and Economic Affairs, said that slower growth is a natural process for a country that has experienced rapid economic expansion. There is no need to panic about a slight rise or drop in the GDP growth rate, he said. For this year, China set its economic growth target at around 6.5%, which is 0.4 percentage point lower than the growth rate of last year. It shows the country’s shift from fast growth to high-quality growth,” said Qian Yingyi, Dean of the School of Economics and Management of Tsinghua University. Hu Xiaolian, Chairwoman of the Export-Import Bank of China, said China should tackle the rising risks from big financial holding companies and their risky practices, such as excessive borrowing and high capital leverage.

China is fully confident in fending off systemic debt risks and expects no major changes in the government’s debt ratio in the coming years, Finance Minister Xiao Jie said. The debt-to-GDP ratio, an indicator of the country’s ability to pay back its debt, dropped to 36.2% in 2017 from 36.7% in 2016, Xiao said at a news conference. It is still far below the global warning line and lower than debt levels of other major economies and some emerging-market countries, he said. By the end of 2017, China’s outstanding debt had reached CNY29.95 trillion, with CNY16.47 trillion in local government debt, or 55% of the total. The proposed total deficit this year is CNY2.38 trillion, unchanged from last year, but the annual target of the deficit-to-GDP ratio is set to be 2.6%, down from 3% in 2017, representing the first downgrade since 2013. Xiao said that a 7.6% increase in budgeted fiscal expenditure to CNY20.98 trillion this year could support stronger investment in infrastructure projects. China’s once-expanding debt has been curbed under tightened governing measures and regulations, leaving more space for further financial opening-up and reforms, said Zhou Xiaochuan, outgoing Governor of the People’s Bank of China (PBOC). Financial reforms would be speeded up, including pushing forward the yuan’s internationalization and lowering market access barriers in the financial sector, he said.

The proactive fiscal policy is also reflected in the proposed reduction of taxes and fees by nearly CNY1.1 trillion this year to lower the operational costs of enterprises. China will actively push forward property tax and personal income tax reforms as it continues to overhaul its fiscal system. The drafting of a reasonable and appropriate national taxation system on property ownership is in full swing, said Shi Yaobin, Vice Minister of Finance. “The tax will be based on the estimated value of the property and will have appropriate tax reductions for low-income families,” he said. A draft of the property tax law will be submitted to the NPC Standing Committee for review soon. The tax could be introduced in parts of the country at the end of 2019 or during 2020. China also plans to set up an institution to financially support homebuyers. Another tax reform measure is the raising of the personal income tax threshold.

Foreign Minister Wang Yi at a press conference for domestic and foreign journalists emphasized that China has no need or intention to replace the United States’ international role, and he warned that if the U.S. wages a trade war, it will “backfire”. Speaking on China-U.S. ties, Wang said there can be competition between the two countries, but they don’t have to be rivals and should be partners instead. He also said that the Belt and Road initiative is a “global public good” that follows international rules. It follows market principles and is a transparent initiative that follows the “golden rule” of extensive consultation, joint contribution and shared benefits. “Everything is in the open. There is no backroom deal, and every step is transparent,” Minister Wang added.

He also highlighted four events China is hosting this year that feature high on the diplomatic agenda:
• The Boao Forum for Asia annual conference in Hainan in April, focusing on reform and opening-up;
• The Shanghai Cooperation Organization (SCO) summit in Qingdao in June;
• The Forum on China-Africa Cooperation summit in Beijing in September, focusing on the Belt and Road initiative;
• The First China International Import Expo in Shanghai in November, focusing on further market opening.

Robin Li, Chairman and CEO of leading Chinese search engine Baidu said that a national investment fund for developing self-driving vehicles should be set up and the authorities should issue licenses to suitable enterprises. China urgently needs to ramp up innovation in the policy sector, he added. Baidu, which is pushing AI to fuel growth, with a special emphasis on self-driving vehicles, is confident that such vehicles can hit the roads next year. The company aims to put autonomous mini-buses that can operate in designated areas into mass production and trial operation by the end of this July, in cooperation with bus manufacturer Xiamen King Long United Automotive Industry Co. It also plans to launch self-driving cars in 2019 in cooperation with manufacturers JAC Motors and BAIC, as well as Chery Automobile Co.

Premier Li Keqiang has delivered his government report at the 13th NPC’s opening session on March 5. He said that China would open up more to foreign investment, GDP is set to increase by 6.5% this year and China’s defense budget will go up by 8.1%. China would open up the telecom, healthcare, education and new energy vehicle sectors to foreign investments. Bank card clearing businesses will be opened to foreign competition and caps on foreign stakes in banks, securities brokerage houses and fund management firms will be removed. He added that China would implement standard market access for both domestic and foreign banks.

Premier Li said China has avoided systematic financial risks and achieved its 2017 economic and social development goals, adding that the results were “better than expected”. China has successfully managed economic downward pressure and avoided an economic “hard landing”. Reviewing the performance of his government since 2013, Li said China made major progress in innovation-driven development, which contributed significantly to the transformation of its economic structure. China has risen to become a global hub for innovative businesses and one of the world leaders in scientific and technological innovation, said Li. Its investment in research and development (R&D) has grown at an average annual rate of 11%, ranking the second highest in the world. Premier Li mentioned successes in building of aircraft carriers, manned spaceflight, deep-water exploration, and quantum communications. China has become a world leader in areas such as high-speed rail, e-commerce and mobile payments.

China’s growth has shifted from reliance on investment and exports to a healthy cocktail of consumption, investment and exports, said Li. China’s economy is now relying more on services than industrial production. “This is a significant structural change that we had been longing to achieve but had failed to achieve,” he said. China has shut down 170 million tons of steel production capacity in the last five years and 800 million tons of coal mine capacity, involving 1.1 million workers. The country would also phase out 30 million tons of steel capacity and 150 million tons of coal in 2018. By reducing the reliance on coal and increasing the use of alternative energy, the concentration in the air of tiny particulate matters in the most polluted areas, including Beijing, has dropped by over 30% in the past five years, and China has played an important role in the global fight against climate change since the Paris Climate Accord, according to the Chinese Premier.

The world is seeing growing protectionism and geopolitical risks, but China is able to achieve better, fairer and more sustainable economic growth. Li told delegates China has reduced the number of people in poverty by 68 million over the past five years and that the nation’s poverty alleviation efforts have achieved “decisive” progress. He added that China has created the world’s largest social welfare network with basic pensions for more than 900 million people and healthcare insurance for 1.35 billion. The Chinese government has set 2018 growth target at about 6.5%, inflation at 3%, and the “surveyed jobless rate” – which includes the country’s 270 million migrant workers – below 5.5%, while energy consumption per unit of GDP is targeted to drop by at least 3%.

China budgeted a fiscal deficit for 2018 at about 2.6% of GDP, 0.4 percentage points lower than in 2017. This will leave more policy leeway for China’s macro-economic control, Li said. The government’s annual budget included CNY1.8 trillion for roads, CNY1 trillion for water management and CNY732 billion for railways. Li said China would cut mobile data communication charges by at least 30% this year. Meanwhile, China would continue its “Made in China 2025” plan by creating “example areas” for this state plan.

Li won applause as he said the government would reduce the tax burden of enterprises, planning to cut CNY800 billion in taxes for companies and individuals this year. The Chinese government would further boost the innovation-drive development by focusing on major projects, such as tackling smog, widespread cancer and other major diseases, and the building of world-class labs. China will keep the yuan exchange rate “basically stable” at a reasonable level in 2018, Li said. China will “strike hard” at illegal fund raising and financial fraud. China would continue to push forward the Belt and Road Initiative to link China to countries along the Silk Road. Big data will be used to improve food safety by tracking the production and supply chain. Import tariffs on automobiles and some consumer goods will be reduced, Li said. On foreign trade, China would fight against protectionism and firmly defend its own interests, Premier Li Keqiang concluded.

The South China Morning Post reported the opening session of the NPC live on its website.

Lawmakers and advisers are meeting at the Great Hall of the People in Beijing for the annual sessions of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC, 2,158 delegates, 40% are Members of the Chinese Communist Party) and the National People’s Congress (NPC, 2,980 delegates, 75% of them attending for the first time). The CPPCC is an advisory body and the NPC the Chinese legislature. This year a new five-year cycle starts and both bodies will get new Chairmen. President Xi Jinping and Premier Li Keqiang are expected to be confirmed in their functions for another five-year term. This is the first session of the legislature after the Communist Party’s 19th Congress in October last year.

The current session of the National People’s Congress is expected to approve changes to the Chinese Constitution – the first amendments to be voted on in 14 years – to remove the two-term limit for the President and Vice President, which could allow current President Xi Jinping to continue in the job for a third term after 2023. “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” is also to be written into the Constitution.

Some changes to ministries and commissions are also expected to be made. Previously, fighting corruption was the task of the Central Commission for Discipline Inspection (CCDI) – a department of the Chinese Communist Party – which after completing an investigation would transfer the case to the judicial organs. A proposal will be voted on by the current NPC session to establish a National Supervision Commission – an organ of the state, not the party – which would have more powers than the Supreme People’s Procuratorate (SPP) and have jurisdiction over all state employees.

Chairman Yu Zhengsheng delivered his report to the advisers of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) on March 3. The advisers formulate proposals which could be taken up by the legislators of the NPC at a later session to be written into law or which could be implemented by the administration.