Full Text: Report on the Work of the Government(8)

5. Deepening reform and opening up and injecting new vitality and impetus into economic and social development

We intensified efforts to overcome difficulties and carried forward reform in major areas and key links to meet reform targets set forth in the Twelfth Five-Year Plan.

We improved the public finance system, particularly the budget management system. We put all extrabudgetary funds under budgetary management; expanded the scope of budgets for the use of state capital; deepened the reform requiring government departments to prepare their own budgets; and moved ahead with publicly releasing government budgets and final accounts. Ninety-eight central government departments as well as provincial and municipal governments, including Beijing, Shanghai, Guangdong and Shaanxi, publicly released information regarding their spending on official overseas trips, official vehicles and official hospitality. We carried out a price-based reform of resource taxes on crude oil and natural gas nationwide, and introduced a plan to replace business tax with value-added tax (VAT) on a trial basis. We extended the use of RMB in cross-border trade settlement to the whole country, launched trials for settling overseas direct investment accounts in RMB, and began settling foreign direct investment accounts in RMB. We deepened reform of tenure in collective forests, launched a trial reform of state forestry farms, and started registration for contracting pastureland in accordance with the law. We pressed ahead with reform of the system for managing the construction of water conservancy facilities and made innovations in the system for managing water resources; and deepened reform of state-owned enterprises. We carried out reform to restructure power grids by separating their main business from auxiliary services and implemented the plan to adjust the prices of on-grid electricity and non-household electricity. We basically completed the reform of county and town government bodies, and proceeded with the reform of public institutions through classification in an orderly manner.

We continued to put equal emphasis on exports and imports, encouraged foreign investment in China and Chinese investment overseas, and made comprehensive improvements to China's open economy. We actively pursued the strategy of diversifying markets and improved the trade mix. China's total volume of trade in goods totaled US$ 3.64 trillion for the year, up 22.5%. Exports and imports grew by 20.3% and 24.9%, respectively, and our trade surplus decreased further. Total utilized foreign direct investment was $116 billion, and a larger proportion of it went to service industries and the central and western regions. Chinese companies expanded their overseas presence, and non-financial outward direct investment reached $60.1 billion. We actively participated in international and regional economic cooperation and continued to deepen multilateral and bilateral economic and trade relations.

We made outstanding progress in improving democracy and the legal system; strengthening national defense and building up the armed forces; and in our work related to Hong Kong, Macao and Taiwan and our diplomatic work.