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"We need to accelerate the reform of the wholly state-owned
commercial banks, focusing on a pilot project to transform the Bank
of China and China Construction Bank into stock enterprises," said
Premier Wen Jiabao Friday.
Other commercial and policy banks must also deepen their reform,
he said in his government work report delivered at the opening of
the Second Session of the Tenth National People's Congress.
China will press ahead with the trial reform of rural credit
cooperatives and, on the basis of a review of that experience,
gradually expand the reform to a wider area.
The premier said that China will continue to reform and open up
the capital market and develop it steadily, adding the government
will allow the amount of bonds issued by enterprises to increase
and the proportion of direct financing by enterprises to rise
gradually.
China will continue reforming the insurance industry and expand
the insurance market. "We need to improve the regulatory systems
for banking, securities and insurance, coordinate these systems
better, and tighten financial control to ensure sound operation of
the financial sector," he said.
China will also carry forward the reform of the fiscal and
taxation systems, with focus on gradually shifting from a
"production VAT" to a "consumption VAT" by reclassifying equipment
investment as VAT-deductible to facilitate the technological
upgrading of enterprises and enhance their capability for
self-development.
These reform measures will be tried out first in some industries
in northeast China this year, according to the premier.
Meanwhile, supporting measures must be formulated quickly so
that the country can carry out the plan for reforming the export
tax rebate system in earnest.
He pledged to carry forward the reform of the investment system,
rationally define the government's investment functions, and
establish a macro-control mechanism for investment and improve
control methods and measures.
The government needs to make intensive efforts to put in place a
system for collecting information on the credibility of enterprises
and individuals, a system for overseeing the credit market, and a
mechanism for penalizing those who lose their credibility, Wen
said.
(Xinhua News Agency March 5, 2004)
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