Hu Kaihong:

Ladies and gentlemen, welcome to the State Council’s weekly policy briefing. Nov 11’s executive meeting discussed boosting and restructuring consumption, as well as combining medical health care with elderly care services, which have attracted widespread media coverage. Today we have invited Mr Lin Nianxiu, vice-director of the National Development and Reform Commission (NDRC), Mr Wang Peian, vice-minister of the National Health and Family Planning Commission, to introduce these policies and answer questions. Our meeting is also joined by Mr Xu Lin, director of NDRC’s Department of Development Planning and Mr Wang Haidong, director of family affairs at the National Health and Family Planning Commission. Now, let’s welcome Mr Lin.

Lin Nianxiu:

Good morning, media friends. Glad to participate in the briefing. The State Council’s executive meeting on Nov 11 issued two documents on developing consumer services and increasing new supplies. I think they were born just in time, especially considering we are in the key stage of developing a moderately prosperous society. Speeding up development of consumer services to unleash the leading role of new consumption is crucial to the upgrades of growth engines and economic quality. Meanwhile, it is also an important measure to improve people’s lives and expand employment. Therefore, it is of current and long-term interests to develop modern services, as well as to cultivate new supplies and engines. The State Council has paid great attention to this issue, which has also been highlighted by President Xi Jinping. We should strengthen structural reform on the supply side while moderately expanding the total demand. Thus, we can improve the quality and efficiency of the supply system, which will help the continuous economic growth and raise our country’s social production to a whole new level.

Lin Nianxiu:

Premier Li Keqiang also said that in China’s service sector lies huge potential, and we should especially promote the development of consumer services centered on enterprises and the people. The Premier said we should meet the new requirements brought about by people’s upgraded consumption, to further tap their passion and potential. Thus consumption can serve as a better driver for economic growth. Other State Council officials have also given specific instructions on this issue. Since the beginning of this year, the NDRC, together with other departments, has analyzed the major barriers that have held back the development of consumer services and the expansion of consumption. We have also conducted research on how to expand consumer services, how to exert leading role of new consumption, as well as how to nourish new engines. Based on a wide range of opinions, we have drafted the two documents.

Lin Nianxiu:

Now, I will take the opportunity to introduce the basics of the two documents. First, the document on consumer services prescribed a systematic guideline on expanding the volume, quality and efficiency of consumer services to fit people’s upgraded consumption needs. Therefore, it is a top-level design, which resonates with last year’s document on developing production-related services. The two have constituted the top-level policy design for China’s modern services. Nov 11’s document identified the development philosophy and main tasks of consumer services. It also seeks to regulate the behaviors of market participants, which is expected to provide powerful and sustainable support for economic growth, social harmony and the transformation of development methods.

Lin Nianxiu:

The document includes three major sections, of which the first part lays out overall goals. This section also describes the one main line, two focus points, three directions, four goals and five principles regarding the development of consumer services.

The main line stands for improving people’s livelihood and satisfying people’s increasing demand for consumer services. We have referred to this main line to draft related measures for the development of consumer services.

Also, the government should focus equally on accelerating development of consumer services and expanding consumption of such services.

Regarding common problems in consumer services, the document proposed three directions on increasing effective service supply, expanding consumption demand of services and improving service quality.

The document also calls for the four goals of expanding overall volume of consumer services with increasing new models, improving infrastructure for consumer services with enhanced functions of public service platforms, improving the model of interactive development between urban and rural areas with a more balanced structure, as well as improving consumption environment with a quality management system and a significant increase in service quality and branding to satisfy both domestic and overseas customers.

The government will also pursue five principles: sticking to the leading role of consumption and the market, highlighting the focus points to drive all-around development, innovating new supplies and promoting new consumption, sticking to quality-oriented development, as well as maintaining green development and the transformation of consumption modes. Such are the fundamentals of the first section.

Lin Nianxiu:

The second section talks about the main tasks. We know consumer services span various spheres, touching almost every aspect of people’s lives and relating to social and economic development. The document selects 10 key areas that closely concern people’s lives, demonstrate huge potential and strong driving force, which include citizens and families, health, elderly care, tourism, sports, culture, law, wholesale and retail sales, accommodation and catering, and education. We have specific tasks for the 10 areas. One point I have to make is that consumer services cover a wide range of more than the 10 areas. The document also calls for guidance on the development of other areas to achieve integrated and standardized growth in consumer services.

The third section is about policy measures. Centered on stimulating enterprises and safeguarding consumers, the document prescribes 65 concrete policy measures from seven aspects of expanding reform and opening-up, improving the consumption environment, strengthening infrastructure construction, improving quality standards, advancing professional development, improving legislature and the statistical system, as well as boosting support in finance, taxation, prices and land use.

I now conclude my introduction of the document on developing consumer services.

Lin Nianxiu:

Let me make a brief introduction on the guiding Opinions to boost consumption. The Opinions elaborated on the general concept of expanding consumption to drive up supply and inject new impetus to the economy.

Generally speaking, it stressed the market’s decisive role in resource allocation, encouraged institutional innovation to arouse fresh vigor in the economy. It said that a further improved consumption environment will allow more room for economic growth, expand supply to meet growing demand, and thus create a virtuous cycle for consumption and investment.

These moves will push forward the upgrading of industries and consumption in a synchronized manner, and lead the economy onto an innovation-driven path while transforming its development mode.

The Opinions stated it will stick to four principles: to follow the trend of consumption and to upgrade industries with the upgrading of consumption; to continue innovation-driven development and to release the potential in consumption with innovative supplies; to recognize the leading role of the market and to ignite social vitality with fair competition; to offer institutional guarantees and to spur demands with institutional innovation.

The Opinions highlighted the fields of service, information, fashion, rural and quality consumption, which are expected to be the direction trends as consumption evolves. Development of these fields, which cover education, medical and culture, will not only offset the withering traditional consumption, but also enhance the human resources and consolidate the foundation for innovation.

The Opinions proposed more than 20 measures in four aspects to ensure its effective implementation, which include speeding up institutional innovation in key areas, fully improving the consumption environment, innovating and expanding effective supply, and optimizing support policies.

Upon the issuance of the two documents, the National Development and Reform Commission will cooperate with related departments to draft support policies. We will also launch a series of big projects to optimize the environment, in order to boost consumer services and shore up consumption.

I will stop here with the brief introduction. I’d like to answer questions later on. Thank you.

Hu Kaihong:

Thank you, Mr Lin. Mr Wang please.

Wang Peian:

Good morning, ladies and gentlemen. Currently, China has 212 million senior citizens above 60 years old. The problem of population aging is serious in terms of speed, scale, and duration.

We have to pay great attention to population aging and make efforts in medical care and nursing services for the elderly.

But we don’t have to worry too much because during the 13th Five-Year Plan, most of the aging population will still be young and healthy.

This is also an opportunity to make preparations to cope with population aging.

Recently, the State Council reviewed and passed a plan regarding the combination of medical care and services for the elderly, which was jointly put forward by the National Health and Family Planning Commission, Ministry of Civil Affairs, Ministry of Human Resources and Social Security, Ministry of Land Resources, Ministry of Housing and Urban-Rural Development, China National Committee on Aging, and the State Administration of Traditional Chinese Medicine.

Next is a brief introduction about the plan.

Wang Peian：

I. The combination of medical care and services for senior citizens is a long-term solution.

China is now at a stage where the aging population is swiftly growing. About 15.5 percent of the total population are above 60 years old, among which a large group suffer from chronic diseases and about 40 million people suffer from disability.

In this context, medical care and services for senior citizens become an urgent need for the aging population.

Since 2013, the State Council has issued several documents about the development of the elderly care service industry.

The central government’s planning of the 13th Five-Year Plan also explicitly gives instructions on the combination of medical care and services for the elderly.

Combination of medical care and services for the elderly will be a good move to meet the diversified needs of the aging population, drive domestic consumption, increase jobs, and improve the economy.

According to past experiences in some regions, combination of medical care and services for the elderly can optimize allocation of resources and reduce burdens on hospitals and health insurance.

Combination of medical care and services for the elderly will create a knowledge-and-labor-intensive industry, which will create more jobs and new growth points.

Wang Peian:

II. We have to advance the combination of medical care and services for the elderly through system and mechanism innovation.

1. The plan set out principles in combining the medical care with services for the elderly: making sure that everyone can enjoy the medical care and services; government should form plans and policies to direct investments, regulate the market, and create a sound environment while the market should play a decisive role in allocating resources and creating a fair and competitive business environment; stimulate market potential and improve services through reform and innovation.

2. The plan set a development target for the combination of medical care and services for the elderly.

According to the Opinions, by 2017, a policy system, standards, regulations, and management system will be established; professional education system and qualified medical or service institutions will be set up; the grassroots medical institutions’ capacity in providing visiting services for the elderly at home will be improved.

By 2020, a comprehensive network of medical care and services for the elderly will be completed; medical institutions’ ability to provide visiting services for the elderly will be significantly improved; all medical institutions will open green channels of appointments and hospitalization for the elderly; all nursing agencies for the elderly will be able to provide different kinds of services.

Wang Peian:

3. The opinion listed the key task of promoting the combination of medical institutions and nursing agencies:

First, we will set up and improve cooperation between medical institutions and elderly care service agencies, encouraging them to practice various kinds of contract cooperation. We will encourage medical institutions to open green passages for elderly care service agencies to book appointments and provide services such as hospital treatment, rehabilitation, daily care and hospice care for the elderly.

Second, we will support elderly care service agencies to provide medical services and apply for the establishment of their own medical departments, clinics and nursing stations.

Third, we will extend medical services to the community and even family in order to provide continuing health management services for the elderly living in their own homes.

Fourth, we will encourage social forces to establish institutions combining medical care with services for the elderly by improving the policy environment and shortening administration approval time.

Fifth, we will encourage the integrated development of medical institutions and nursing agencies, coordinate medical care service and elderly care service resources and increase general hospitals’ and grassroots medical institutions’ capacity in providing services for the elderly.

4. The Opinions improved measures to promote the combination of medical care and services for the elderly. And we will also improve the financing, tax and price policies to expand financing channels and encourage and guide financial institutions to increase support for eligible institutions by innovating financing products and service modes. For overall land use, urban and rural planning, we will consider the development needs of these institutions. We will also encourage eligible areas to establish a long-term nursing insurance system and strengthen the training of related talent and information support.

III. We will enhance coordination between different government departments and jointly promote the integrated development of medical care and services for the elderly.

After the Opinions are published, we will work closely with related departments to implement the Opinions and improve related policies and measures and pool various resources to accomplish the key tasks listed in the Opinions. We will also set up trial programs and encourage local regions to actively explore an effective combination of medical care and services for the elderly. And we will sum up and promote useful experiences and practices to speed up the effective combination of medical care and services for the elderly.

Hu Kaihong:

Thank you, Mr Wang. Now questions.

China Daily:

The fifth plenary session of the 18th CPC Central Committee proposed in the 13th Five-Year Plan to make service sectors related to daily life develop “greater refinement and higher quality”. So do you propose any specific policies and related measures? The service sector related to daily life enjoys a high degree of marketization, so how to manage this relationship between the market and the government? Also, previously there were calls to expand domestic demand, and now there’s a call to release new demands and generate new supplies. What is the reason behind this shift in policy? The questions are for the officials from the National Development and Reform Commission.

Lin Nianxiu:

I will answer all your three questions one by one. On boosting the refinement and quality of service sectors, it is important indeed and we have dedicated a lot to drafting this document. Based on our survey and research, the most demanding issues include the status quo that the service sector is accompanied by excess and low quality, and customization is far from enough. One of the paths toward addressing these issues is to boost refinement and high-quality services. So the guidelines have made some arrangements. First, highlight the perception of innovation and development, and putting the perception in place is a precondition for fully implementing the various missions and policy. The guidelines have called for stressing the living and consuming concept of advocating environment protection, seeking better quality and ensuring culture. Second, stick to the development principle of “quality first” and improving quality. Our development should prioritize quality. Third, make the daily life-oriented service sector more convenient, refined and more quality-oriented. Fourth, convert consuming styles into a development-oriented, modernized and service-oriented ones.

Moreover, the refinement and high quality should center on demand, adapt to and create demand. Therefore, this document addresses public pursuits and proposes three directions for the service sector. First, increase the effective supplies of services, encourage market entities to innovate concrete servicing operations and corporate models, and increase needed services and develop new services. Second, expand consumer demand for services, embark on developing services that fully cover the wide range of public needs, address new demands, and adapt to the improving consumer structures, and the rise of new consumption. Third, improve the quality of services, which is a necessity and a precondition for boosting refinement and quality. All walks of life should put quality first and then integrity, quality development circumstances should be optimized, service quality management system should be perfected and customers’ survey mechanism should be refined.

Third, we proposed detailed requirements for 10 priority aspects in accordance with the respective status quo. For example, the document proposed that the residential and household service sector should provide professional services and nurture a range of famous brands of household services. In the health service sector, the document proposed improving service quality and regulating nursery services.

Additionally, the policies and measures mentioned in the document have also called upon boosting the refinement and quality of some infrastructure facilities to boost the use of artificial intelligence and connectivity.

Lin Nianxiu:

You asked about how to tackle the relationship between the government and the market, which is very important. Because the sector covers a wide range of aspects, and all 10 priority aspects enjoy a high degree of marketization and market competition, where tackling the relationship is necessary. I believe one of the most fundamental principles is to make the market play a dominant role in distributing resources and make the government better function as required by the third plenary session of the 18th CPC Central Committee.

There are two specific aspects for accelerating the development of daily life-oriented service sector. First, reinforce the leading role of the market. Fully tap into the dynamics of market entities, motivate them and make the market play its dominant role in distributing resources, which is of great importance. Second, the government should better function by improving its governance in planning, policy guidance and market supervision in order to ensure fair and equal competition, and create an sound market environment.

To be more concrete, I would like to list seven roles the government should better play. First, optimize circumstances for the development. We should eliminate provisions and requirements that do not adapt to the changing situation and new requirements or do not facilitate fair competition. We should expand the system reform regarding investing and financing to introduce various public capital into the sector. We should boost the reform of approval systems to streamline and downsize procedures, boost efficiency and strengthen supervision during and after.

Second, improve the environment for consumers. We should boost the degree of integrity, supervision and inspection as well as law enforcement.

Third, reinforce the construction of infrastructure facilities. We should increase investment by introducing more social capital, tackle weak links by upgrading shanty urban infrastructures and the lack of residential infrastructures in rural areas, and boost the level of automation, artificial intelligence and connectivity within the infrastructure.

Fourth, perfect the quality-standard system. We should improve the assurance of quality and refine the standard system.

Fifth, boost the degree of professionalization. The departments in charge should plan for the respective sectors and play a guiding role. We should encourage colleges and vocational schools to establish new majors to cater to household, elderly care and health care services.

Sixth, reinforce the guiding role of policies. On finance and taxing policies, we should convert the business tax into value added tax. We should renovate the use of treasury funds. We encourage businesses to go public or issue bonds. On land policies, we encourage localities to prioritize the use of land for the sector. On pricing policies, the document requires further regulating the pricing mechanism. The price of electricity and fees for using debit or credit cards should be controlled.

Seventh, establish and refine the laws, regulations and statistics system.

Lin Nianxiu:

For the third question, fully tapping into the leading role of new consumption is important indeed. First, we should boost upgrading the industrial structure, and second, we should prompt upgrading the consumption structure. We should base our efforts on the needs of the market, and meet the need for upgrading consumption to boost industrial development and upgrading. The leading role could be explained in four aspects. First, lead and boost the expansion of valid supplies. We have seen both excessive supplies of low-level and low-end services as well as the lack of supplies in high-level and high-end services. The document has proposed expanding valued supplies through multiple channels.

Second, lead and boost the innovation of systems. We should strengthen system building to better adapt to the new consumption, new sectors. The document has proposed eliminating barriers in the mechanism and activating the dynamics within the market.

Lin Nianxiu:

Third, the consumption environment should be simultaneously approved. The standard building in the country for the service sector and emerging sectors is indeed lagging behind.

Fourth, boost the optimization of the policy system regarding development. Currently, part of the new consumption depends on supplies overseas, and as you know, many Chinese travelers are going abroad for shopping, and consumption abroad has reached 1 trillion yuan. The document has proposed shaping a policy that facilitates the coordinated development between the consumption upgrade and industry upgrade.

That will be all.

China News Service：

Mr Wang, the concept of healthy aging has become popular recently, and some experts consider it a world consensus. So what is your definition of healthy aging, and could you make a brief introduction on what work has been done to the healthy aging issue, and what is the next plan?

Wang Peian:

Thank you, first I will explain the definition of healthy aging. It means continuously developing and supporting the functions and abilities for the elderly to live healthy, and increase their happiness and benefits. What I said includes two aspects: one is their own physical and mental health, namely they can live without disease, and the other is a better living environment and social service. For example, even if the elderly are not in good physical condition, they can still take part in social activities with the help of effective medical treatments, medical instruments or convenient transportation tools nearby. Healthy aging is not only dependent on the elderly themselves, but also extends to how society supports this group.

The Communist Party of China and the Chinese government attach great importance to the health issue of the elderly and the combination of medical care and services. And they also made concrete plans to speed up the development of healthy elderly care services and promoting the combination of medical care and services for the elderly.

The National Health and Family Planning Commission (NHFPC) is actively implementing the work, and advancing them gradually.

First, we basically build a medical insurance system, covering both urban and rural areas. Medical security systems such as the New Cooperative Medical Scheme, and medical assistance systems have benefited hundreds of millions of the aging population, and the healthcare insurance system for critical illnesses has gradually reduced their burdens.

Second, medical care services for the elderly has been improved. In the process of the new medical reform, we also provide convenient and preferential services for them according to their difficulties and special needs. The continuing development of medical institutions also helps provide better services and expand access to medical treatment.

Third, we implemented the healthy management of the life cycle and improved the disease prevention system for the elderly. As medical services gradually extends to communities and private families, we record documents for people 65 years old and up, provide an annual free health checkup and give advice on their health based on the results. And the key is to prevent them from getting cardiovascular diseases and chronic diseases such as cancer, and increase their awareness of health management and health knowledge.

Fourth, promote the steady progress of a combination of medical care and services, fully taking advantage of all the resources and implementing remote services and mobile medical care to meet the multi-layer and diversified nursing demands of the elderly.

In the next step, based on the aging population’s characteristics of size, fast speed, aging issues, unbalanced and aging without enough financial assets, we will systematically analyze the demands and challenges the elderly face. We will pay more attention to the needs of the group with health problems, chronic diseases and disabled or partly disabled. In the 13th Five-Year Plan (2016-2020) period, we will strengthen and improve the medical resource allocation for the elderly, expand the work on promotion, disease prevention and healthcare, medical care and rehabilitation and build a service system based on the conditions in China, thus laying a foundation for the country to achieve the goal that everyone, including the elderly, can enjoy basic medical care services by 2020.

Reuters:

I want to ask Mr Lin a question. The policy issued on Nov 11 says that imports of daily consumption products will be expanded and establishment of domestic duty-free stores will be encouraged. However, we don’t know what measures will be adopted to achieve the goal. Will you reduce taxes on daily consumption products, establish some new free trade zones or adopt some other measures to achieve the goal of expanding imports of such products?

Lin Nianxiu:

It’s a very good question. Please let Mr Xu Lin answer your question first.

Xu Lin:

In recent years, more Chinese consumers go abroad for shopping, so it is not unusual to see Chinese tourists coming back, hands full of bags stuffed with products they have purchased in foreign countries, at airports or ports of entry. Moreover, some Chinese consumers have to wait in long lines to make purchases in foreign countries, and especially when they go through tax exemption procedures at airports. It reflects the rising demand of Chinese consumers for imported goods, which, of course, has many reasons. We just mentioned the pursuit of quality products. People may wonder if products from foreign countries are of higher quality. Thus, in order to better meet consumer demands, we decided to further expand import channels and open more duty-free stores, so that Chinese consumers and foreigner consumers can buy more imported goods in China. Expansion of imports is also in line with the strategy of optimizing import and export put forward in the CPC Central Committee’s proposal for China’s development over the next five years. We will import more high-quality goods to meet domestic demand. Policies and measures will be further implemented along with the issuance of related documents. Thank you.

China National Radio:

Mr Wang, lots of medical institutions and nursing institutions for the elderly have difficulties introducing medical services because they don’t qualify for healthcare insurance, and many elderly people must go to hospitals to make sure their nursing fees can be reimbursed. Since we are working on the combination of medical institutions and nursing institutions, have you considered expanding the coverage of healthcare insurance to include some of these institutions?

Wang Peian:

Thank you for your question. As is clearly pointed out in the guideline, eligible medical institutions set up by nursing institutions for the elderly can be included in the basic healthcare insurance system. For elderly people who live at home, the guideline asked the grassroots medical and healthcare institutions to improve their ability to serve them.

First, combine the grassroots medical and healthcare institutions, and community services for the elderly with network platforms.

Second, provide basic services such as regular physical examinations, on-site inspections, community nursing and health management for elderly people.

Third, establish a service relationship between the grassroots medical and healthcare institutions, and medical care personnel with elderly households.

Fourth, establish criteria for medical services provided to the elderly at home and include eligible medical expenses in the healthcare insurance system.

China Business News:

Mr Wang, we paid much attention to the loosening of the one-child policy. Can you tell us how far the revisions in the Family Planning Law go? Has the draft been completed? Will the policy be launched on Jan 1, 2016?

Wang Peian:

This is a good question. Many people and families are very concerned about this issue. Actually, we prepared to revise the law long ago. We have organized expert teams and research groups to do research on this policy. Among the seven groups, there is a group in charge of the law revision. They started their work in March this year. We have conducted lots of research and proposed a revised plan. We have consulted with many related departments and the revised plan is under way according to procedures.

Hu Kaihong:

That’s all for today’s policy briefing. Thank you.