Full text of Chinese Premier's teleconference address on streamlining administration procedures, cutting red tape (2)

Under the new historical circumstances, reform measures such as streamlining administration and scaling back administrative power are no expediency but important steps that both deliver short-term benefits and meet long-term needs. To realize the dual objectives of maintaining a medium-high-level growth rate and moving toward a medium-high-level of development, we need to foster new growth drivers through such reform as streamlining administration and scaling back administrative power. With a fluid situation, the world economic recovery is an uphill journey. The Chinese economy has entered a state of "new normal" and a critical stage where we need to deal simultaneously with slower economic growth, difficult structural adjustments, and the impacts of previous economic stimulus measures. In the first quarter this year, the economy faced many headwinds, but thanks to the targeted regulation measures we adopted since the second half of last year, the downward pressure has been somewhat offset. Now the economic performance is stable on the whole, with positive trends seen in some aspects. For instance, the surveyed unemployment rate dropped in April and industry has been rebounding. But still we are under considerable pressure in other aspects, for example investment is further decreasing. We must roll out more effective measures to sustain the upward momentum and resist the downward pressure. Fundamentally speaking, this requires the government to streamline administration and scale back its administrative power, ease restrictions and strengthen regulation where necessary, and improve services. We have both the confidence to keep the economic performance within a proper range, and the capability to reach the main goals for this year and maintain medium-high rate and level of growth for a fairly long time to come. We are confident because the Chinese economy has big potential, strong resilience, and ample space for readjustment. As long as we stay committed to deepen reform and strengthen the twin engines for economic growth, we will build up stronger and longer lasting force for development, and through hard efforts, bring about a new round of stable and enduring growth for the Chinese economy. Streamlining administration and scaling back administrative power is also essential for building a new system for an open economy. With profound adjustment in the global economic landscape and changing conditions of resource and production factors, our traditional competitive strengths are waning. Weak demand in the international market means heavy pressure for our imports and exports to grow. Therefore, we must speed up the building of an open economy and develop a network of high-standard free trade zones open to all other countries and an international and law-based business environment. We must explore the use of a management model based on pre-establishment national treatment and a negative list, foster and expand new competitive strengths in international cooperation. To achieve these, it is essential for the government to streamline administration and scale back administrative power, lift or exercise regulation where necessary and provide better services. I visited the four free trade zones, including the one in Shanghai. A major feature of them is streamlined administration and devolved administrative power that enable companies to get registered and investment projects to get started more quickly. To improve governance capacity, the government needs to deepen such reform as streamlining administration and scaling back administrative power. The government should withdraw from certain areas as needed so as to do a better job where its role is duly required, just as "cutting off extra branches and leaves helps to make the trunk stronger", so to speak. Only when the government further delegates power where necessary, focuses on where regulation is needed, and provides adequate services, can it be possible for us to come up with new practices in governance, and better meet people's will, promote development and facilitate social harmony.

To encourage all people to start their own business and make innovation, we need to streamline administration and scale back administrative power, reform that will remove obstacles and set a proper stage. History is created by the people, and a country's prosperity and progress must be driven by its people's creativity. By encouraging our people to become entrepreneurs and innovators, we hope to leverage their role as the masters of the country and their unlimited creativity so that our people can all participate in modernization and share in the benefits of reform and the fruits of development.

- Encouraging start-ups and innovation will boost development, increase people's wealth, promote social equity and strengthen the country. It is therefore an integral part in building socialism with Chinese characteristics. To encourage start-ups is conducive to creating more jobs, increasing people's income and boosting domestic demand. At the same time, it enables people to live a more fulfilling life. It is also the surest way to realize common prosperity for our people. Redistribution alone is not enough to narrow the income gap. Primary distribution should be the main approach to enable more people to get rich. Reality on the ground already shows that where there is a more enabling business environment and a larger number of start-ups, the local economy will be more vibrant, income higher and wealth gap smaller. We now encourage the general public to make innovation. This is intended to foster a culture of innovation in our society. In such a society, we will have more fertile soil for innovation, a stronger push for innovation and a greater impact from innovation. To encourage start-ups and innovation by the public will enhance not only the "hard power" of the national economy but also the soft power of the country. It serves the fundamental interests of the public and meets the needs of each and every worker. A country where start-ups and innovation thrive must be one of promise, energy and progress.

- Encouraging start-ups and innovation is not just relevant for individuals and newly established companies. In fact, well-established companies, including the bigger ones, should also keep their vitality and competitiveness through entrepreneurship and innovation. Just have a look at those successful companies with staying power. With no exception, they are the ones who keep up with the times and constantly innovate and forge ahead. Otherwise, they would have closed down a long time ago. In recent years some big companies have recognized the trend of Internet development and personalized consumption, and remade their management model. They have reshaped the traditional hierarchical management model into new platforms for their employees to pursue entrepreneurship and innovation. Such platforms are also open to the society. Employees can apply the novel ideas nurtured on such platforms in their own work or with a third party. As such, the company has thus become a big hub of resources for innovation. It can support more small- and medium-sized companies, boasts stronger capacity for innovation and can deliver more diverse products. There is a great deal that businesses can do in tapping their entrepreneurship and innovation.

- We have unique strength in encouraging start-ups and innovation. China has over 1.3 billion people, including a 900-million-strong workforce. The average education level of our working-age population is 10 years, higher than the world average. The education level of our newly added workforce has reached 13 years, approaching the average of medium developed countries. There is huge untapped potential for human resources to be turned into human capital. Meanwhile, we also have over 70 million market entities, including over 18 million companies. Our people and market entities have strong desire for entrepreneurship and innovation, but many have been held back by both tangible and invisible restrictions. We therefore must deepen reform to streamline administration and scale back administrative power. This will get rid of the obstacles and enable our people and market entities to travel light and grow stronger. We have mapped out reform plans for the Shanghai Pilot Free Trade Zone, which has attracted a large number of domestic entrepreneurs, financial companies, and intermediaries, as well as foreign companies. Speedy progress is also being made in institutional reform in the free trade zones in Guangdong, Tianjin and Fujian. Experience gathered in these free trade zones must be timely applied to the rest of the country so that China, with an improved business environment, stands out as the most appealing destination for foreign investment. (mo