Guideline issued to deepen reform

NDRC to seek stable growth and boost economic transformation

The National Development and Reform Commission on Friday released a guideline to deepen economic reform, in a further step to seek stable growth and promote economic transformation.

A total of 22 major tasks in seven fields were set as priorities for this year, including delegation of approval authority, as well as fiscal and financial reforms to stimulate the real economy and promote an energy-saving and environmentally friendly development, according to the guideline posted on the central government's website.

The guidelines aim to boost China's growth momentum, amid uncertainties in the global and domestic markets, said Kong Jingyuan, director-general of the department of comprehensive reform of the economic system at the NDRC.

Two months after the government took office, the State Council has already reformed 133 administrative approval procedures, among which 107 were removed, according to a statement on the central government's website.

Kong said some of the reforms are not yet finalized as they involve legislative procedures, but details will be made public soon.

The document also pledged tax reform, including resource-tax reform to tax coal production on a value basis instead of volume, as well as expansion of the value-added tax pilot program to replace business tax and lower the tax burden for companies.

The VAT reform is expected to save taxpayers in pilot areas this year around 120 billion yuan ($19.6 billion).

According to the guideline, the personal property tax, which is being piloted in Shanghai and Chongqing, will be expanded to more regions. Kong said the authorities are studying detailed plans for its expansion.

In addition, the guideline called for reforms in the financial sector to push forward market-oriented interest rates and the convertibility of the country's capital account.

Further reforms in market-oriented interest rates might change the unilateral appreciation of the yuan, Gui Haoming, chief analyst at Shenyin & Wanguo Securities, was quoted by China National Radio as saying.

"A wider daily floating range of the currency will reflect the supply-demand relationship more accurately, and therefore reduce expectations of unilateral appreciation of the currency," he said.

The guideline also urged the establishment of a deposit insurance system to guard against risks that banks and depositors are exposed to during financial crises.

Regarding railway investment and financing projects, the guideline called for a proper pricing mechanism for railways' operations to create conditions for the introduction of private capital.

The reform of power and energy prices was another key task mentioned in the document, as the NDRC called for a ladder-price mechanism for electricity, water and natural gas to charge higher per-unit prices for extra usage.

A detailed development plan for the country's urbanization strategy will be formulated soon.

Lian Qihua, deputy director-general of the department of comprehensive reform, said the plan will be published "within this year", and that a working conference for the country's urbanization drive will also be held within the year.

Lian denied a recent media report indicating that the NDRC's urbanization plan was rejected by top decision makers due to concerns over further expansion of local government debt, adding that the plan is being "modified and improved".