Plan to focus on high-quality development

More structural tax cut policies will be in place to bolster small- and medium-sized enterprises and support the real economy.

China’s state planner on Monday outlined measures to promote high-quality development during the 14th Five-Year Plan period (2021-25) and support economic recovery.

China will continue to implement macroeconomic policies to promote the steady, healthy and sustainable development of the national economy, and make timely adjustments in accordance with changes, said Ning Jizhe, deputy head of the National Development and Reform Commission.

The country will continue to implement a proactive fiscal policy, Ning noted, adding that in 2021, the general public budget expenditure will exceed 25 trillion yuan (US$3.85 trillion), up 1.8 percent from a year earlier.

More structural tax cut policies will be in place to bolster small- and medium-sized enterprises and support the real economy, Ning said. The country will prolong the policies on inclusive loan repayment extension and the credit loan support program for smaller businesses. Inclusive loans for SMEs by major commercial banks will increase by over 30 percent, he said.

The country will continue to promote reform and build a high-standard market system to stabilize the market for foreign trade and investment. It will also promote the construction of Hainan free trade port and other highlands for opening-up, boosting the dual circulation development pattern with the domestic economy as the mainstay.

Ning said China will focus on the demand side management to cultivate domestic demand system and coordinate the development of both domestic and external demands. The country saw a 4 percent drop in per capita consumption expenditure, which was affected by COVID-19.

Ning also said it is necessary to strengthen scientific and technological self-reliance, and improve innovation capabilities. China will substantially increase investment in basic researches, strengthen key core technology research, and further strengthen international cooperation in this field.

The country will issue new infrastructure construction plan to boost the digital economy, expand 5G application and accelerate the construction of industrial Internet and data centers, Ning noted.

China set its GDP growth rate at over 6 percent for 2021. Hu Zucai, vice chairman of the NDRC, said this is the first time that the GDP indicator has been set in a qualitative way in the five-year economic plans.

Despite the strong economic recovery in China, uncertainty is still quite high as the pandemic is not over yet globally. A qualitative growth target will leave room for the uncertainty and help China respond to various risks and challenges in a more active and flexible way, Hu said.

This does not mean that GDP growth is not required. The plan sets quantitative indicators such as unemployment rate, energy consumption and carbon emissions, which are connected to GDP growth and implies the efforts to fulfill the potential of economic growth.

Hu warned that China should not simply talk about GDP growth and sacrifice quality benefits and ecological environment for the sake of economic growth, as the country has shifted to high-quality development.

The country drew up the draft outline for the 14th FYP (2021-25) for Economic and Social Development and the Long-Range Objectives through the Year 2035, which has been submitted to the Two Sessions for review.

The draft also covers employment, income, education, medical care, pension, elderly care and other livelihoods fields. The government is forecasting the creation of over 11 million new urban jobs this year, with an unemployment rate under 5.5 percent.

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