Chinese economy needs confidence. That seems to be what the Chinese Premier Li Keqiang tried to convince with the Government Work Report earlier in the Great Hall of the People. The biggest round of applause came from the time when he was trying to announce there will be reduction of taxes and fees for Chinese companies and enterprises all over this country.
Where does that come from? Well, part of it is coming from the reform of ‘value-added tax' or VAT. In the manufacturing sector, for example, it's about from 16-percent reduction to 13-percent. And also in transportation, 10 to 9 percent. Construction sector as well. The other part of the reduction is coming from the contribution of companies and enterprises for social securities. And all together added up, two trillion yuan, as big as that, a boost of confidence for the Chinese companies and enterprises this year alone.
That, of course, will contribute to the gross of the Chinese economy which now needs confidence. Last year, gross rate was about 6.6 percent GDP, now it's aiming at 6.0 to 6.5. But numbers are not the only story, the most important thing is the practice that China will use to boost its economy. As you may know, over the past few years, China has been using the way of having big government boosting stimulus packages, but that will have some side effects while at the same time boosting economy.
For example, the profitability of companies for the mid and long term, and also the huge debt issue, not only at local level but also at central level. Well, China is trying to reduce the financial risk. It's certainly worth noticing that the Chinese government has put out the policy to reduce taxes and fees in order to boost confidence, and therefore the overall economy.
It sounds like a very simple logic. However this turn, a policy might mean that China is really looking at the market-oriented economy and to use market as the deciding factor when it comes to its economic policies.
As I walked out of the Great Hall of the People with the deputies of the National People's Congress, many were telling me they were encouraged by the policies put forward in the Government Work Report. However, they also emphasized, once and again, about the importance of implementation. Because they say only with real implementation with those good policies can they become real boosts to the confidence of Chinese economy.
I'm Tian Wei, from the Great Hall of the People in Beijing.