Ladies and gentlemen,
I would also like to take this opportunity to briefly talk about the Chinese economy and our policy orientation as they may be topics of interest to you. In 2018, despite difficulties and challenges, China’s economy grew by 6.6 percent and exceeded 90 trillion yuan, or 13.6 trillion U.S. dollars. A total of 13.61 million new urban jobs were created and the surveyed urban unemployment rate was 4.9 percent at the end of last year, which means we have achieved fairly full employment. This year, China faces a more complex and challenging development environment. In the Report on the Work of the Government adopted at last month’s annual session of the National People’s Congress, we made a comprehensive analysis of the situation and laid out a series of major policies and measures.
The Chinese economy has maintained a stable performance on the whole this year. In particular, we have seen quite a number of positive changes since March: the manufacturing Purchasing Managers’ Index and its sub-indices on production and new orders rebounded to the highest point in months; fixed-asset investment, imports and exports, freight volume and electricity generation grew at a faster pace; consumption remained stable; and trading in the capital market was vibrant. As things stand now, we are seeing a notable improvement in market expectations, better performance of the business sector, especially SMEs, and growing dynamism for internally driven development.
We are confident that the main targets for this year, including a 6-6.5 percent GDP growth, can be achieved. We will maintain the current macro policy orientations, and avoid adopting strong stimulus policies, such as quantitative easing and excessive money supply. Instead, we will keep to the central task of supply-side structural reform and create conditions for steady economic performance by further advancing reform and introducing measures in accordance with market principles and the rule of law. Going forward, we will concentrate our efforts in the following three areas.
First, we will take steps to energize market entities and improve the business environment. Robust market entities provide a strong driving force for economic growth. China has more than 100 million market entities, including over 34 million enterprises. On average, 18,000 new enterprises are established each day. If more and more market entities can be in vibrant operation, we will acquire a solid bulwark against the downward pressure on the economy.
This year, we will cut taxes and fees on a larger scale, which is expected to reduce the tax burden and social insurance contributions of companies by nearly two trillion yuan. Tax cuts for enterprises will lead to lower fiscal revenues, yet the spending in key areas such as people’s livelihood must be maintained. Then what is our solution? Instead of substantially raising the deficit-to-GDP ratio, we are asking governments at all levels to tighten their belts, explore every possible means to expand revenue and reduce spending, and follow a new approach of putting idle assets and funds to better use while notably cutting general expenditures. We will make the negative list on market access shorter, streamline administrative approval procedures, strengthen impartial regulation, and improve the efficiency of government services, with a view to creating a level playing field for market entities of all types.
Second, we will take steps to pursue innovation-driven development and strengthen new growth drivers. Innovation is the primary driving force for development. China has more than 170 million people in its workforce with higher educational background or professional skills. China also has the largest pool of scientific and technological personnel in the world, and a big internal market. Such conditions have given a strong boost to technological innovation and industrial application from both the supply and demand sides. To foster new growth drivers, we are developing emerging industries and promoting the transformation and upgrading of traditional industries at the same time. China is the largest manufacturer in the world. We will strengthen the industrial foundation and the capacity for technological innovation, build industrial internet platforms, and empower the manufacturing industry with digital, internet, smart and green technologies.
E-commerce, mobile payment, sharing economy and other new business forms and models are booming. These are the results of innovation by Chinese companies that are encouraged by the accommodative and prudential regulatory approach taken by the Chinese government. Going forward, we will step up the R&D (research and development) and application of big data and artificial intelligence, foster clusters of emerging industries and strengthen the digital economy. New growth drivers now contribute more than one third of China’s economic growth and more than two thirds of new urban jobs. They are giving China new strengths to pursue development.
Third, we will take steps to promote all-round opening-up and build an open economy at a higher level. The National People’s Congress of China adopted the Foreign Investment Law a few weeks ago. We are bringing forward the formulation of matching regulations so that they can enter into force together with the law on 1 January next year. This will help build an enabling business environment based on the rule of law and up to international standards. We are expediting the implementation of the measures announced, including shortening the negative list on market access for foreign investors, further opening up the financial and other sectors, and strengthening the protection of intellectual property rights.
China has grown into a major international investor. We will encourage credible and capable Chinese enterprises to invest overseas in an orderly fashion. China has actively expanded import from other countries. Since last year, we have voluntarily cut tariffs four times, bringing the overall tariff level down to 7.5 percent, a lower middle level in the world. We will also further improve the facilitation of customs clearance to significantly reduce cost and improve efficiency. As China continues to develop an open economy, it will create greater opportunities for companies of CEE countries.
Ladies and gentlemen,
As a saying goes, “When the wind is at our back, lose no time in setting sail.” In the face of a great opportunity to deepen China-CEEC cooperation, I hope business leaders from both China and CEE countries will work in concert to open up new prospects for China-CEEC economic and business cooperation.