The Chinese economy is at a crucial stage of transition from old to new growth drivers and a stage of economic transformation and upgrading. We will focus on development as the top priority and promote steady progress as we pursue innovative, coordinated, green, open and shared development. We will ensure that the government's macro policies are stable, industrial policies are well-targeted, micro policies are flexible, reform policies are solid and social policies meet people's basic needs. While appropriately expanding aggregate demand, we will steadfastly advance supply-side structural reform, concentrate on cutting overcapacity, reducing inventory, deleveraging, lowering costs and strengthening weak links, so that China's development could be less reliant on natural resources and be more driven by human resources and innovation. This will enable the Chinese economy to maintain medium-high growth rates and move to medium-high development levels.
We will guide economic transformation and upgrading through innovation. Innovation is the primary driver of development and an important part of supply-side structural reform. We need to further implement the innovation-driven development strategy, and step up efforts to build an innovation-driven country and a strong country in science and technology, so as to provide robust support for economic transformation and upgrading.
We will accelerate the development of the new economy and cultivate new growth drivers. We will vigorously advance innovation in science and technology, work for breakthroughs in major, key technologies, and promote the commercialization of innovation results. We will also advocate mass entrepreneurship and innovation, further promote the “Internet+” strategy, extensively apply the new generation of information technologies such as the Internet of Things, big data and cloud computing. We will promote integrated development of different sectors and facilitate the emergence of more new industries, new forms of business and new business models. It is also necessary to roll out new products and services that better meet the needs of the market and build platforms for mass innovation, crowd sourcing, collective support and crowd funding. This way, we could pool strengths to accelerate innovation and cultivate new areas of economic growth.
We need to transform and upgrade traditional drivers of growth at a faster pace. Innovation is not only about developing the new economy. It is also about transforming and upgrading traditional industries to give them new vitality. We will implement the Made in China 2025 initiative to make manufacturing more IT-based and smarter. We will conduct custom-tailored and flexible production to meet consumers' diverse needs. We will accelerate changes in models of production, management and marketing and create new industry chains, supply chains and value chains. This will make Chinese manufacturing more competitive.
The new vision of development that we advocate is also about developing a sharing economy. The sharing economy is one of mass participation. Greater economic globalization and the spread of the Internet have provided a big stage and broad space for entrepreneurship and innovation by the people. Through mass entrepreneurship and innovation, we will combine the innovation activities of the elites with the grassroots, the on-line with the off-line, and companies with research institutes, so that individual efforts of numerous market players will lead to greater synergy for innovation-driven development. If we could make full use of the Internet to efficiently match the massive amounts of information about supply with that about demand, we could then bring about cooperation among and sharing of R&D and professional expertise and skills. The sharing economy is something that everyone can take part in and benefit from. It could unleash everyone's potential, facilitate reasonable income distribution, expand the middle income group, allow more people, in particular the young, to fulfill their dreams through hard work, and promote social equity and justice.
We will enhance economic transformation and upgrading by comprehensively deepening reform. We have relied on reform for the remarkable achievements we made in the past 30-plus years. And fundamentally, we must rely on reform if we are to remove the institutional obstacles hindering development and advance economic transformation and upgrading. We will firmly deepen reform to unlock market vitality and social creativity to a greater extent.
We need to advance structural reform, in particular that on the supply side. The structural problems facing the Chinese economy are about both the supply and demand sides, especially the supply side. We need to advance structural adjustment through reform, reduce inefficient and low-end supply, and expand effective and medium- to high-end supply. This is conducive to economic transformation as well as growth. A major task for us is to phase out outdated production capacity and address overcapacity, especially in steel, coal and other sectors that face difficulty in operation. Initial progress has been made in recent years, as is shown in the lowering production of raw coal and crude steel, but our efforts must well continue. We will adopt a market-based and rules-based approach and apply strict standards in environmental protection, quality and safety. The biggest challenge is how to address possible layoffs in this process. Businesses need to take multiple measures to ensure that their employees will get reemployed. Both the central and local governments should provide necessary support to take care of the affected employees. Overcapacity is a global challenge. The fact that we have taken the initiative to cut overcapacity demonstrates that China is indeed a responsible country.
We also need to further streamline administration, delegate power, strengthen regulation and improve services. We need to transform government functions more rapidly, improve efficiency, and ensure a level-playing field for all players and a pro-innovation institutional environment. We need to give priority to “simplicity” by taking away undue government powers and delegating them directly to the market and society wherever possible. At the same time, we need to strengthen and innovate in market oversight, explore inclusive and effective prudential regulation, and guide and support the healthy development of new business forms and models. For those players that follow the right direction but have encountered problems, we need to give them prompt guidance, fix the problems and remove potential risks. We need to give them reasonable space for development instead of rejecting them outright. As for those conducting illegal operations or fraud in the name of innovation, we will punish them to the full extent ofthe law. We need to strictly protect intellectual property rights. We also need to promote the “Internet plus government services” model, and set up an open platform of government public services, so that government data could be shared as much as possible. This will make it easier for individuals and companies to get things done and start up businesses, and it will enhance government efficiency.
We will promote in a coordinated way reforms in the fiscal, taxation, finance, investment and other key areas. We have put in place a nation-wide reform to replace business tax with value-added tax. This major effort to cut taxes and lower the tax burden will facilitate the innovative development of modern service industry, SMEs and micro businesses. We will deepen the reform of the financial system, accelerate the improvement of the modern financial regulatory regime and increase the efficiency of financial services in supporting the real economy. We will also intensify reforms in SOEs, rural areas, investment and financing, foster a social credit system and unleash even greater vitality for economic development. The private sector is an important force driving economic development. We will do more to remove obstacles for private businesses, lift unreasonable restrictions on market access and strive to stimulate private investment.
We will transform and upgrade the economy through opening-up. Opening-up, being one kind of reform itself, will in turn spur reform efforts. No matter how developed China will become, it will always need mutual-learning with the rest of the world, and it will open still wider to the outside. We will enhance our open economy, open wider the service sector and general manufacturing sector, provide more investment opportunities to foreign businesses and foster a fairer, more transparent and predictable investment environment. All companies registered in China, Chinese-funded, foreign-funded, joint ventures or independently-owned, will be treated as equals. Their legitimate rights and interests will be protected, and they will have access to better public services. Facing the current complexities and fluctuations in the international financial markets, China will adhere to a managed, floating exchange rate regime based on market supply and demand with reference to a basket of currencies. The fundamentals of the Chinese economy determine that there is no basis for persistent depreciation of the RMB. We have the capacity to keep the RMB basically stable at an adaptive and equilibrium level. China is committed to peaceful development and a win-win strategy of opening-up. We stand ready to work with all other countries to promote inclusive and balanced growth as well as green and sustainable development.
Ladies and Gentlemen,
Tianjin is a big port in the world, where people could start a voyage to sail to the vast ocean. For a giant ship to sail far, sustained and strong driving force is needed. China will work with other countries to seize the opportunities brought by the new round of technological and industrial revolution. Together, we will build new engines of economic growth, promote steady recovery of the world economy through transformation and upgrading, and jointly usher in a better future for the development of mankind. I wish this forum a full success.