Esteemed Deputies,

Delivered at the Fifth Session of the 12th National People's Congress of the People's Republic of China on March 5, 2017

On behalf of the State Council, I will now report to you on the work of the government and ask for your deliberation and approval. I also wish to have comments on my report from the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).

In the past year, China's development has faced grave challenges posed by a great many problems and interwoven risks and dangers both at home and abroad.However, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, we the Chinese people have risen to the challenge and worked hard to press ahead, driving forward sustained, healthy economic and social development.At the Sixth Plenary Session of the 18th Party Central Committee,the core position of General Secretary Xi Jinping was formally affirmed, which reflects the fundamental interests of the Party and the Chinese people, and is of crucial and far-reaching significance for ensuring the flourishing and long-term stability of the Party and the country. All regions and all government departments have steadily strengthened their consciousness of the need to maintain political integrity, think in big-picture terms, uphold the leadership core, and keep in alignment.Pushing ahead with all-around efforts, we have achieved major progress in finishing building a moderately prosperous society in all respects, made important strides in deepening reform, continued to exercise law-based governance, and made further progress in practicing strict Party self-governance; and we have accomplished the year's main tasks and targets for economic and social development, and got the 13th Five-Year Plan off to a great start.

Employment growth exceeded projections. A total of 13.14 million new urban jobs were added over the course of the year. The number of college graduates finding employment or starting businesses reached another record high. The registered urban unemployment rate stood at 4.02 percent at year-end 2016, the lowest level in years. For China, a large developing country with a population of over 1.3 billion, attaining this level of employment is no easy task.

Continued advances were made in reform and opening up. Breakthroughs were made in reforms in major sectors and key links, and initial success was achieved in supply-side structural reform. New measures were introduced for opening China up, rapid progress was made in pursuing the Belt and Road Initiative, and a number of major projects and industrial-capacity cooperation projects with other countries were launched.

Second, we focused on five priority tasks -- cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness -- thereby improving the composition of supply.

Particular priority was given to cutting overcapacity in the steel and coal sectors. Over the year, steel production capacity was cut by more than 65 million metric tons and coal by over 290 million metric tons, going beyond annual targets. Effective assistance was provided to laid-off employees.

We supported migrant workers in buying urban homes; and we increased the proportion of people affected by rebuilding in rundown urban areas receiving monetary compensation, making good progress in reducing real estate inventory.

Business acquisitions and reorganizations were encouraged, direct financing was promoted, and market- and law-based debt-to-equity swaps were carried out, lowering the debt-to-asset ratio of industrial enterprises.

To help enterprises lower operating costs, we introduced measures to cut taxes and fees, lower the share paid by enterprises for social security contributions(Notes: This includes old-age insurance, health insurance, unemployment insurance, workers' compensation, maternity insurance, and housing provident fund schemes). We boosted efforts to strengthen areas of weakness and undertook major initiatives that both help to meet urgent needs today and promise long-term benefits.

Third, we worked hard to deepen reform and opening up, further strengthening the vitality of development.Reform was deepened across the board, and a good number of landmark and pillar reform initiatives were undertaken.

To balance the government-market relationship -- the pivotal issue in economic structural reform -- we continued reforms to streamline administration, delegate powers, and improve regulation and services. My administration's goal of cutting the number of items requiring government review by a third had been achieved ahead of schedule. On that basis, last year we cancelled the requirement on a further 165 items for review by State Council departments and authorized local governments. We also overhauled and standardized 192 items of intermediary services for government review as well as 220 items of approvals and accreditations for professional qualifications. We deepened institutional reforms in the business sector. We introduced an oversight model of random inspection and public release across the board(Note: The model comprises inspections of randomly selected entities by randomly selected inspectors and the public release of inspection results., and cut the price of electricity), made operational and post-operational oversight more effective, and promoted the Internet Plus government services model.

We pushed ahead with reforms to restructure and reorganize state-owned enterprises (SOEs) and introduce into them mixed ownership structures. We established a review system to ensure fair competition. We deepened resource tax reforms.

We improved measures for separating rural land ownership rights, contract rights, and management rights, and established a mechanism for determining whether people have been lifted out of poverty. We made progress in reforming the science and technology management system, gave greater autonomy to colleges and research institutes, and adopted profit distribution policies oriented toward increasing the value of knowledge. We opened up the elderly services market. We expanded the trials of comprehensive reforms in public hospitals and deepened reform of the evaluation and approval systems for medicine and medical equipment.

We formulated unified measures to determine and register natural resource rights. We piloted reforms for conducting direct oversight by provincial-level environmental protection agencies over the environmental monitoring and inspection work of environmental protection agencies below the provincial level, as well as crop rotation and fallow land reforms. The river chief system was introduced for all lakes and rivers across the country, and the mechanisms for compensating for ecological conservation efforts were improved. Reform has given new impetus to economic and social development.