[Two Sessions Quick Report] Li Keqiang: Strengthen Supply Guarantees for Raw Materials, Key Components, and Other Essential Inputs.

BEIJING, March 5 (Xinhua) — In his government work report delivered on March 5 to the Fifth Session of the 13th National People's Congress, Chinese Premier Li Keqiang stated that it is essential to enhance the core competitiveness of the manufacturing sector. He pointed out that a batch of industrial foundation reconstruction projects should be launched.

Li Keqiang said that we should deeply implement the innovation-driven development strategy and consolidate and strengthen the foundation of the real economy. We should advance scientific and technological innovation, promote industrial optimization and upgrading, break through bottlenecks in supply constraints, and rely on innovation to enhance the quality of development.

Li Keqiang proposed enhancing the capacity for scientific and technological innovation. We will implement a 10-year plan for basic research and strengthen long-term, stable support for it. We will also carry out a three-year action plan to deepen reform of the science and technology system, bolstering the nation’s strategic scientific and technological forces, fully leveraging the roles of national laboratories and key national laboratories, advancing reforms in scientific research institutions, and improving the mechanisms for initiating and managing major scientific and technological projects. We will encourage localities to increase their investment in science and technology and foster regionally distinctive innovation initiatives. We will promote international scientific and technological cooperation. We will accelerate the building of a globally significant center for talent and an innovation hub, refine the systems and mechanisms for talent development, step up support for young researchers, and enable all kinds of talented individuals to focus wholeheartedly on their work and fully demonstrate their capabilities.

Li Keqiang stated that we should intensify incentives for corporate innovation, strengthen the role of enterprises as the main players in innovation, continuously advance efforts to tackle key core technologies, and deepen the integration of industry, academia, research, and application. We must also enhance the protection and utilization of intellectual property rights, promote the development of venture capital, innovate science and technology financial products and services, and raise the professionalism of science and technology intermediary services. We will step up implementation of the policy on additional deductions for R&D expenses, raising the deduction rate for small and medium-sized high-tech enterprises from 75% to 100%. We will introduce tax incentives for enterprises’ investments in basic research, refine policies such as accelerated depreciation of equipment and instruments, and offer preferential corporate income tax rates for high-tech enterprises. These measures amount to substantial financial support from the state for corporate innovation. It is crucial to effectively implement all kinds of innovation incentive policies to encourage enterprises to increase their R&D investment and foster the growth of new drivers of economic growth.

Li Keqiang stated that it is essential to enhance the core competitiveness of the manufacturing sector, promote the steady operation of the industrial economy, strengthen the supply security of raw materials and critical components, implement projects aimed at safeguarding and stabilizing the supply chains led by flagship enterprises, and ensure the security and stability of industrial and supply chains. Financial institutions should be guided to increase medium- and long-term loans to the manufacturing sector. A batch of industrial foundation reconstruction projects should be launched to facilitate the upgrading of traditional industries, accelerate the development of advanced manufacturing clusters, and implement the National Strategic Emerging Industry Cluster Project. We will focus on fostering “specialized, refined, distinctive, and innovative” enterprises and provide strong support in areas such as funding, talent recruitment, and the establishment of incubation platforms. We will advance the building of a country strong in quality and drive industries toward the mid- to high-end segments.

Li Keqiang also emphasized the need to promote the development of the digital economy and strengthen the overall planning for building a Digital China. We should build digital information infrastructure, advance the large-scale application of 5G, facilitate the digital transformation of industries, and develop smart cities and digital villages. We must accelerate the development of the industrial internet, foster and expand digital industries such as integrated circuits and artificial intelligence, and enhance our capacity for innovation and supply in key software and hardware technologies. Furthermore, we should improve governance of the digital economy, unlock the potential of data as a key production factor, and better harness data to boost economic growth and enrich people’s lives. (End)