Shou Xiaoli:

Due to time constraints, we are open to two more questions.

Economic Daily:

Currently, China's economy faces new downward pressure, and the country's GDP in the fourth quarter of 2021 only expanded 4% year-on-year. We noted that the government work report proposed many policies and measures in this regard. What are the considerations behind this? Thank you.

Xiang Dong:

China's economy in 2022 faces the triple pressures of shrinking demand, disrupted supply, and weakening expectations, and we must overcome these difficulties. Building on an in-depth analysis of situations both at home and abroad, the government work report has made comprehensive arrangements for the tasks of the government in 2022, proposing a series of policies and measures which aim to continuously maintain sound economic and social development. Regarding your question, I personally think that we can analyze the measures in the following aspects.

First, we need to follow the general principle of prioritizing stability and seeking progress while ensuring stability. The term "stability" is one of the keywords of this year's report and has been mentioned 76 times. The report clearly stipulates that the work in 2022 should follow the aforementioned general principle and attach greater importance to stabilizing growth. All regions and sectors need to take responsibility for stabilizing the economy and proactively introducing policies that help ensure economic stability.

Second, we need to stick to the main policy direction, ensuring stability in the macroeconomy. The report proposed that the efficiency of proactive fiscal policies should be improved and that the fiscal spending will increase by over 2 trillion yuan over the previous year. The central government transfer payments to local governments will reach nearly 9.8 trillion yuan, 1.5 trillion yuan more than the previous year, up 18%, the most significant increase in recent years. A total of 3.65 trillion yuan of local government special bonds will be issued, and 640 billion yuan will be earmarked for investment in the central government budget. China will further strive to implement a prudent monetary policy to expand the scale of newly-issued loans. The policy that prioritizes employment will be further strengthened. China will spare no effort to ensure food and energy security. The report stressed that more efforts should be made to stabilize the production and ensure the supply of grain and other vital agricultural products, keep crop acreage stable and boost the yield of soybeans and other oil crops, in a bid to ensure the food supply for 1.4 billion Chinese people.

Third, we need to properly implement policies to ensure the stable growth of market entities and employment. The report put forward a package of highly effective and well-targeted, hardcore measures. For example, China implemented a new set of combined taxation policies. The total volume of tax refunds and cuts is expected to total around 2.5 trillion yuan, including 1.5 trillion yuan of value-added tax credit refunds. For businesses that didn't lay off employees or only had a few layoffs, refunding unemployment insurance will be continuously implemented. The ratio of funds refunded to micro, small and medium-sized enterprises will significantly improve. More support will be given to catering, hospitality, retail sales, tourism, passenger transportation, and other industries and businesses facing difficulties.

Fourth, we will work to complete the new tasks of expanding domestic demand and improving the quality of economic development. For example, the report rolled out measures of raising the extra tax deduction coverage for small and medium-sized sci-tech enterprises from 75% to 100%. It also calls for granting tax breaks to enterprises that invest in basic research and improving policies on accelerated depreciation of equipment and tools and preferential corporate income tax for new and high-tech enterprises. Furthermore, to speed up the recovery of consumption and investment, the report introduced effective measures of supporting the purchase of new-energy vehicles, accelerating the upgrading of urban pipelines, including those for gas supply, and keeping energy consumption of major national projects under separate management. Meanwhile, according to the report, the government will fully implement all major regional development strategies and coordinate regional development, improve the quality of new urbanization, improve the environment and promote green and low-carbon development.

Fifth, we will implement new initiatives to deepen reform and expand opening-up. The report introduced a series of new measures to build a high-standard market system, advance reforms of state-owned enterprises and the fiscal, taxation, and financial reforms, and deepen reforms to streamline administration and delegate power, improve regulation, and upgrade services. This year, we will face tremendous pressure to ensure stable foreign trade and foreign investment. Despite all the changes in the international landscape, we will open wider to the world and take multiple measures to stabilize the overall performance of foreign trade and foreign investment.

Sixth, we will take new measures to ensure and improve people's wellbeing. Policies and measures in this regard have been a highlight of each year's government work report. This year's report has also rolled out a raft of pragmatic measures. For example, the government will allocate educational resources according to the size of the residential population, and see that school-age children can enroll in nearby schools; steadily enhance services for the prevention and treatment of illnesses including cardiovascular and cerebrovascular diseases and cancer, and better ensure the supply of medicines for rare diseases; appropriately raise the basic pensions and pension standard for urban and rural residents, which will benefit nearly 300 million people; and make care expenses for children under three part of the special additional deductions for individual income tax to ease the burden of giving birth and raising a family.

Seventh, we will meet the new requirements for the improvement of government. Facing new developments and tasks, the government must adopt a new approach. The report requires that governments at all levels and all government employee perform their duties, shoulder their responsibilities, make concerted efforts to promote development and ensure public wellbeing and accomplish new achievements.