Government Work Under Microscope
Beijing Review reporters interview NPC deputies and CPPCC members to hear their viewpoints on topics covered in the government's annual work report
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Special> NPC & CPPCC Sessions 2014> Latest Headlines
UPDATED: March 13, 2014
Key Reform Agenda to Watch as Parliamentary Session Wraps up

As the annual session of China's top legislature draws to a close, attention is trained on the various government organs to see how they will carry out the wide-ranging reforms outlined during the ten-day event.

Following are some key reform areas to watch in 2014.

Cutting Administrative Red Tape

In 2014, the central authorities aim to cancel or delegate to lower-level governments an additional 200-plus items requiring State Council review and approval.

"We will deepen reform of the investment approval system and abolish or simplify preliminary review and approval procedures," Premier Li Keqiang pledged in his government work report delivered at the opening of the annual session of the National People's Congress (NPC).

Delegating power is a "self-imposed revolution," said NPC deputy Xie Zilong.

This is part of the country's intention to cut government intervention to allow the market to play a "decisive" role in allocating resources.

Free deposit rate within two years

Central bank governor Zhou Xiaochuan said on Tuesday that China is very likely to ease its grip on bank deposit rates within one or two years, which is widely considered the last and most important step of interest rate liberalization.

Zhu Yuchen, president of Shanghai Pudong Development Bank, said the regulators and the banking sector have made a lot of preparations to realize the task of establishing a deposit insurance system mentioned in the government work report.

"When the government has fostered a comfortable market environment, reforms will naturally follow," said Zhu, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top political advisory body.

Zhu said he considers nascent business models such as Internet finance a push for interest rate liberalization and an opportunity that will ultimately lead to more options for the public and more competitive big banks.

War against pollution

Premier Li said China will "declare war" against pollution by starting to reduce PM10 and PM2.5 emissions.

A total of 50,000 small coal-fired furnaces will be shut down this year and 6 million old high-emission vehicles will be removed from the roads, according to the report.

In 2014, China aims to cut energy intensity by more than 3.9 percent. Sulfur dioxide emissions and chemical oxygen demand will both be reduced by 2 percent.

"Protecting the environment is protecting our productivity," said NPC deputy Wang Wenzhong.

Resource and energy pricing reform

Xu Shaoshi, head of the National Development and Reform Commission, said the country will push resource and energy pricing reform this year on the precondition that no extra burden will be imposed on the average resident's basic spending on water, electricity and gas.

NPC deputy Zhao Rifeng expected the reform effort to be stepped up, but proposed building a coordinated mechanism that takes into account social assistance and social security standards, as well as the impact of inflation.

"Pricing reform is not equal to a price raise. The public's basic needs should be a top priority," said Zhao.

Unified pension scheme

China will establish a unified basic old-age insurance system for both rural and non-working urban residents and reform the old-age insurance system for government bodies and public institutions.

The non-privileged have long complained about the differentiated pension scheme in China.

The key in reforming the system is to challenge vested interests, noted NPC deputy Zhang Yuangui.

Property tax legislation

Fu Ying, spokesperson for the second session of the 12th NPC, said at a news briefing that the top legislative body is moving ahead with property tax legislation.

China has been wrestling with runaway home prices for years, with the introduction of pilot property tax programs in Chongqing and Shanghai in 2011 as one of its latest recourses.

NPC deputy Qin Xiyan said the legislation process will involve adjustment of the existing 11 property-related taxes, which is expected to reduce transaction costs and address the problem of overlapping taxes.

Regulated use of official vehicles

Using public vehicles for private purposes has been common in China, but authorities are trying to reform the system as pledged in the government work report.

"By taking away the 'cakes' of the privileged, the government will win the heart of the public," said NPC deputy Yuan Shouqi.

Public hospital reform

The government work report mentions that trial comprehensive reform of county-level public hospitals will be extended to cover 1,000 counties and 500 million rural residents, and trial reforms of urban public hospitals will also be expanded.

Liu Yushu, a member of the CPPCC National Committee, said health care reform should start with creating a new mechanism through proper price-setting for drugs, increased government subsidies, and reduced costs on the part of hospitals.

Since 2009, some big public hospitals in a few megacities have started to cut patients' spending on drugs and use a system of outpatient services that increases the registration fee for diagnosis and treatment.

Such measures have stopped hospitals from overcharging through the sale of drugs, and increased doctors' incomes. Over 300 county hospitals ran pilot programs in 2013.

(Xinhua News Agency March 12, 2014)

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