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Xu Shaoshi:

Advancing supply-side structural reform is a major strategy of the CPC Central Committee with General Secretary Xi Jinping as the core. Since it was started last year, the reform has received much attention from the CPC Central Committee, and all parties involved have worked hard to push it forward. Achievements have been made in four respects:

First, initial success has been scored in cutting industrial capacity, reducing housing inventory, lowering leverage, cutting corporate costs and improving weak economic links. Last year, the annual targets for capacity cutting were achieved ahead of schedule and beyond expectations. The target for the iron and steel industry was 45 million tons, involving the resettlement of 180,000 employees; the target for the coal industry was 250 million tons, involving the resettlement of 620,000 employees. By the end of last year, nearly 700,000 employees had been resettled. Corporate members of the China Iron and Steel Association suffered a combined loss of 52.9 billion yuan from January to November in 2015; but they reported a profit of 33.1 billion yuan in the corresponding period in 2016. Coal mining enterprises also saw their profits rise by 110 percent in the first eleven months of 2016. The floor space of unsold commercial residential housing had been on the decline for ten consecutive months since January 2016. The work to push forward market-based debt-for-equity swap and corporate mergers and restructuring is also underway in an orderly fashion. The cost for developing the real economy has fallen, and the work to shore the weak links in key sectors has also achieved positive results.

Second, the government, the market and enterprises have gained valuable experiences through practice and exploration. A number of enterprises have undergone mergers and restructuring, the biggest case being the merger of Baosteel and Wuhan Iron and Steel into Baowu Steel Group Corporation. In Shanxi Province, a major coal producer, arrears of wages have fallen remarkably and the estimated value of assets has risen substantially.

Third, people now have a deeper understanding of reform, and relevant work has deepened. Capacity cutting in the iron and steel as well as the coal industries is progressing in an orderly fashion. In addition, industries such as cement, plate glass and ship building are voluntarily cutting industrial capacity, optimizing existing capacity and guiding the arrangement of new capacity.

Fourth, we have received positive opinions about reform from different sides. There has been greater international recognition. Quite a few countries, having now realized the limitations of continued quantitative easing monetary policy, are paying more attention and attaching greater importance to structural reform. Many well-known international institutes and media organizations believe that with the closedown of outdated capacity, corporate mergers and restructuring, the debt-for-equity swap and securitization of assets, China's economy has begun to gather new growth momentum, which will usher in a new round of economic growth for some time to come.

This finishes my introduction. Now I would like to take your questions.

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