Premier Li Keqiang on April 5 stressed the importance of reform at the State Council’s executive meeting, which made clear this year’s key tasks for economic system reform.

“We must rely on reform to achieve this year’s targets for economic and social development,” said Premier Li.

Reform will inevitably involve the adjustment of interests, the Premier pointed out, and “all government departments should work together to promote reform and ensure a stable and positive economy.”

He said that priorities should be given to expanding economic system reform. Using the metaphor of drawing fishing nets, he said that a few key actions could drive forward all-around reform.

On supply-side structural reform, Premier Li put emphasis on weeding out outdated capacity in coal, steel and coal-fired power industries.

“We should use market-oriented and legal measures to cut excess capacity, fulfilling the tasks of reducing overcapacity while ensuring employees get new jobs,” the Premier said.

He also urges efforts to carry out measures in destocking in property sectors, and step up improving the public rental housing system, giving more weight to rentals than sales.

On delegating power, Premier Li stressed that the government should put more efforts in strengthening operational and post-operational supervision and improving services.

Market access restrictions for investment in manufacturing industries, still a barrier to investors, should be further eased to revitalize the real economy and develop advanced manufacturing industries, he said.

Premier Li also emphasized the quality of State-owned enterprises (SOEs) reform, saying that SOEs should focus on their main businesses, or risk losing their core competitiveness and suffering from redundant functions.

In addition, he underlined that the move to promote SOE reform and to support the development of small and medium enterprises (SMEs) should go hand in hand, in an effort to boost employment and entrepreneurship while unleashing more market vitality.

Premier Li said that the value-added tax (VAT) reform will be further promoted and fully implemented this year, adding that tax rates will be reduced from four levels to three, making the tax system simpler and more transparent.

As for reform in the financial system, he asked financial institutions to better serve SMEs, to help resolve their financing difficulties, while stressing that related supervision should be strengthened.

“Major State-owned commercial banks should focus more on SMEs and micro businesses by setting up inclusive finance departments and implementing differentiated policies in evaluation and support, which should be accomplished as a key task for this year,” the Premier said. “As I stated in this year’s government work report, problems concerning these enterprises’ financing difficulties must be solved, and I’ll see real results this year!”

“Every department must fulfill its responsibilities accordingly, and finish their tasks one by one,” the Premier added.