Top planner warns of economic challenges

BEIJING - China's top economic planner warned Wednesday that challenges remain in investment and trade, and meeting annual growth targets will require "arduous efforts."

It is estimated that pressure will still remain in economic development in the second half of 2016, said Xu Shaoshi, chairman of the National Development and Reform Commission, during the top legislature's ongoing bimonthly session.

While delivering a report to the session, Xu expressed confidence that the country could meet its major annual targets in economic growth, employment, commodity prices and residents' income.

He also said it was expected that targets for poverty reduction, energy consumption, environmental protection and renovation of substandard housing would be met.

"Great difficulties remain in meeting goals for investment and trade," Xu said, while elaborating on a national economic and social development report.

"Currently, the foundations for stable economic development are not solid enough and downward pressure remains."

The international economy has not recovered as expected, and trade protectionism has gained ground, Xu told lawmakers, adding that geopolitical risks and the increasingly complicated regional security situation will disturb economic stability.

On the domestic front, difficulties remain for the stable growth of demand, and regional polarization has evolved, with potential risks in sectors such as finance and employment needing attention, Xu said.

He also cited farmers' incomes, the increasing number of environmental incidents, severe production safety situation and the arduous tasks of disaster prevention, reduction and relief as difficulties the country must address.

Wednesday afternoon's plenary session was attended by Zhang Dejiang, the chairman of the National People's Congress (NPC) Standing Committee.

Stabilizing macroeconomic policy

According to Xu, China will continue to design and implement targeted and flexible macro-control measures, and pursue a proactive fiscal policy and a prudent monetary policy.

The country will further reduce tax burdens for enterprises and closely follow the implementation of the replacement of business tax with VAT, said Finance Minister Lou Jiwei while delivering a report during Wednesday's legislative session.

China plans to formulate a pilot policy on commercial pension insurance with individual tax preferences offered to applicants, Lou said.

Also, the country is mulling an increased export rebate rate for some mechanical and electrical products and hopes to fine-tune the policy for individual income tax for equity incentives, Lou said.

The central government will promote public-private-partnerships (PPP) and accelerate the PPP legislation procedures, he added.

Meanwhile, China has promised to review government investment, promoting the use of funds to support startups in emerging industries, according to Lou.

Advancing key reforms

During the session, Xu said China was determined to further cut the number of items needing government approval and advance reforms in key sectors including state-owned enterprises, finance and taxation.

The central government will roll out assessment measures for environmental protection and improve intellectual property protection for enterprises, Xu added.

As China's economy settles into the "new normal," which features slower growth, the country will continue to boost development of emerging industries, said Xu.

The central government will formulate a "negative" list for the country's "Internet Plus" strategy and other supporting measures for the "Made in China 2025" plan, according to Xu.