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CCTV:

As for supply-side structural reform, the Central Economic Working Conference at the end of last year noted that the reform would be deepened this year. My question is, what measures hasthe Ministry of Finance taken to support the reform?

Liu Wei:

It's a good question. Supply-side structural reform involving a wide range of aspects is a key reform that will have profound influence; hence, all sides should coordinate and implement measures in a comprehensive way in order to accomplish reform tasks assigned by the Central Government. The Ministry of Finance and its subordinate departments have been followingthe spirit of the Central Economic Working Conference, deployment set in the Report on Government Work, and the new vision of development, so as to promote supply-side structural reform in the three following aspects:

First, carry out five tasks ofcutting overcapacity, reduce the excess urban real estate inventory,cutting costs,deleveraging and strengthening areas of weakness. We have appropriated specific incentive and subsidy funds of industrial enterprise restructuring in a timely way and supported personnel placement in the process of cutting overcapacity in the steel and coal sectors. We adjusted and completed subsidy policies on corn and soybean and cut policy-type inventories of cereal, cotton and oil. We improved the ratio of monetized compensation for personnel resettlement during shanty town renovation to cut real estate inventory. We implemented and completed policies related to enterprise merger, restructuring, and the assignment and writing-off of debts. We have carried out measures to lower taxes and administrative fees to relieve the burden on enterprises. We have also stepped up poverty alleviation in poor regions, promoted the pilot program of agriculture funds integration in all poverty-stricken counties, and supported local governments to explore ways of poverty alleviation through assets income.

Second, we have been pushing for supply-side structural reform in agriculture. Specifically, we have carried out green-oriented reform of agricultural subsidies, introduced a disaster insurance scheme on a pilot basis for farmers whose operations are suitably scaled-up in 200 major grain-producing counties from 13 major grain-producing provinces or provincial-level regions. Moreover, we will also work with related departments of the State Council to provide some preferential policies and subsidies for producing and processing high-quality grain and oil, as well as for brand promotion, in order to meet upgraded consumer demand.

Third, we have been pushing for the transformation and upgrading of the real economy through innovation. Specifically, we will continue to increase assistance for basic research, deepen the implementation of "Made in China 2025," support smart manufacturing and green manufacturing, strengthen industrial foundations, and carry out trials of the insurance compensation mechanism for newly-developed major technological equipment.

Under support of fiscal policy and other macro policies, supply-side structural reform is gradually producing a telling effect: the relationship between market supply and demand is improving, business performance and expectations have become stronger, and the economic structure continues to be upgraded. Next, under the direction of the CPC Central Committee and the State Council, we will continue to focus on supply-side structural reform, gradually implementing the priority tasks of "cutting overcapacity, reducing excess inventory, deleveraging, lowering costs and strengthening areas of weakness," so as to ensure supply-side structural reform in agriculture, rejuvenate the real economy, and promote healthy and continuous economic growth.

Thanks.

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