IV. Accelerating the Transformation of Government Functions

Scientific macro control and effective government administration are the intrinsic requirements for exploiting the advantages of the socialist market economy system. We should transform government functions, deepen the reform of the administrative system, exercise government administration in an innovative way, increase public trust in the government and improve its competence, and build a law-based and service-oriented government.

14. Improving the macro control system. The major tasks of macro control are to maintain balanced economic aggregates, coordinate major economic structures, optimize the distribution of the productive forces, mitigate the impact of periodic economic fluctuation, defuse regional and systematic risks, stabilize market expectations, and realize sustained and sound economic development. We should improve the macro control system guided by the national development strategy and plans mainly through fiscal and monetary policies; institutionalize the formulation of macro control objectives and the implementation of policy measures, and enhance the coordination of fiscal, monetary, industrial and pricing policies. We will improve the discretionary monetary policy and ensure that macro control is more proactive, pertinent and coordinated. We will establish a mechanism of participating in international macroeconomic policy coordination, and improve the overall global economic governance structure. We will deepen the reform of the investment system, and ensure the dominant role of enterprises in investment. All enterprise investment projects, except for those concerning national security or ecological security, distribution of the major productive forces, strategic resources development and major public interests, should be decided by the enterprises independently in accordance with the law, and no longer require government approval. Market access standards will be reinforced regarding energy, land and water conservation, environment, technology, security, etc. and a long-term mechanism will be established and improved for preventing and dissipating excess production capacity. We will improve the development progress evaluation system, correct the bias of evaluating political achievements merely by the economic growth rate. We will increase the weight of other evaluation indicators such as resources consumption, environmental damage, ecological benefits, excess production capacity, sci-tech innovation, production safety and new debts, while more emphasis will be put on employment, residents' income, social security and public health. We will establish a unified national accounting system, formulate national and local balance sheets, and promote information sharing between government departments by setting up a nationwide database containing real estate and credit and other basic information.

15. Fully and correctly performing government functions. We will further streamline the administration and delegate more power to lower levels, deepen the reform of the system concerning matters subject to government examination and approval, and reduce the central government's administration in micro affairs to the greatest extent. We will cancel all administrative approval procedures for economic activities under the effective regulation of the market mechanism. We will manage matters that require administrative approval according to procedures and with high efficiency. We will transfer large-scale and widely-participated-in social and economic projects to local and community-level management for convenience and efficiency. The government will strengthen the formulation and implementation of development strategies, plans, policies and standards, enhance market activity monitoring and supply of public services. We will enhance the central government's competence in macro control, improve local government's performance in public services, market supervision, social management and environmental protection. We will promote government purchases of public services by means of contract and entrustment, and introduce a competition mechanism into general-affairs management services. We will accelerate the reform of public institutions based on the classification of their functions, increase government purchases of public services, straighten up the relationship between public institutions and their competent administrative departments, and promote de-administration of public institutions. We will create conditions to gradually rescind the administrative ranks of schools, research institutes and hospitals. We will set up legal person governance structure for public institutions, transform qualified public institutions into enterprises or social organizations, and establish a unified registration system for the management of public institutions of all kinds.

16. Streamlining the government structure. Institutional restructuring is a must for the transformation of government functions. We will improve the government organizational structure, function composition and work procedures so that we will have a good administrative system with decision-making, executive and oversight powers checking each other and functioning in concert. We will have strict management on performance, fulfill government responsibilities, and ensure the integration of power and responsibility. We will promote the reform of Party organs, government departments and mass organizations as a whole, and clarify their responsibilities. We will actively yet steadily advance the reform to establish larger government departments. We will improve the structure of the administrative setup and geographic administrative divisions, and experiment with placing counties and county-level cities directly under the jurisdiction of provincial governments where conditions permit. We will strictly control the size of government bodies, appoint leading officials in strict accordance with designated government positions, reduce the number of government organs and leading officials, and rigorously control the number of personnel supported by state finance. We will promote scientific and law-based management of government staffing with due procedures.

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