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.