This year's "Two Sessions" – the second session of the 13th National People's Congress and the second session of the 13th National Committee of the Chinese People's Political Consultative Conference – made more of a splash than usual and to a greater extent than ever before, the Party focused on engaging the Chinese public with its plans and policies. Because the government will require the contribution and effort of people at so many levels and in different parts of the country and the economy, it is vital that its policies and programs are not viewed as something crafted in an ivory tower, particularly to those in the provinces, but are of direct relevance to the everyday lives of every single Chinese. And this applies not only to the Chinese; the rest of the world also needs to see what is happening in China, as improving international economic relations is essential to the program's success.

The modernization of the dissemination of public information has been a widely overlooked but crucial part of the modernizing projects of China's reform and liberalization policy over the last 40 years. Now we have reached the point at which the way the government disseminates its plans to the the public is almost as important as the plans themselves. It is no longer enough for the people to be told simply what the government is doing and what is expected of them without explaining the wider context. 

As he always does on these occasions, Premier Li Keqiang laid out this program when he presented the government work report. He added that one key area needed to boost economic development is for the government to reduce the costs on industry caused by government demands. As such, the taxation and social security burdens laid on Chinese enterprises will be reduced by almost 2 trillion yuan (US$300 billion). The value-added tax (VAT) rate payable by most industries will fall from 16 percent to 13 percent, with essential industries that build infrastructure, like transport and construction, paying only 9 percent. There is, of course, a delicate balance that needs to be maintained here; China cannot allow too steep a fall in government revenues, especially as the requirements of military modernization mean that rising expenditure (7.5 percent over last year) outstrips the current growth rate. There are savings which can still be made such as the usual reductions in spending on official transport and entertainment as part of a planned cut of 5 percent in general state expenditure. However, as has been found all over the world, enterprise can only flourish if it is allowed and encouraged to find ways to reduce costs. 

Another essential factor for the growth of enterprise is investment. The government will maintain and strengthen its own investment program and its steady moves towards dismantling restrictions on foreign investment will continue. This will also lead to the strengthening of China's mutually beneficial links with the rest of the global economy, which is a crucial part of diplomacy. 

The government also announced the extension of more loans to small businesses, which should assist economic growth in the provinces and support the program of direct poverty alleviation funding. Expenditure for this program is slated to rise by an impressive 18.9 percent. This will necessitate a small increase in the provision of a budget deficit, from 2.6 percent to 2.8 percent.

The need for this tricky balancing act is not unique to China; all countries face it in some shape or form. Government expenses must not strangle the productive economy, and any economic program must look to long term sustainability rather than become a series of annual rescue packages. And, as will happen from time to time, external developments could cause problems. This cannot be avoided. The mercurial behavior of the current U.S. administration, which veers between a cooperative and confrontational attitude must be factored in: This is not a problem of China's making and certainly not one China needs in the current climate. China needs to show resilience above all other things in today's world, and resilience does not come cheap.

Environmental problems cannot be neglected as well, and it is to China's credit that it shows no signs of sacrificing the interests of the environment to those of the economy. The reduction of air and water pollution, the responsible use of energy and the exploitation of renewable sources all hold the same importance as they always had. China's environmental protection budget is set to rise by up to 25 percent over last year. 

China's government has set an ambitious objective for itself and the country, and a highly disciplined and focused approach will be required. That was the central message conveyed in Beijing this month.

Tim Collard is a columnist with China.org.cn. For more information please visit:

http://www.ccgp-fushun.com/opinion/timcollard.htm

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