Translated with notes by Sam Chetwin George. Edited by Johanna Costigan and Graham Webster.
Xi Jinping Presided Over the 25th Meeting of the Central Commission for Comprehensively Deepening Reform, Emphasizing:
Strengthening the Construction of Digital Government
Promoting the Reform of Fiscal Systems at and Below the Provincial Level1
Li Keqiang, Wang Huning, and Han Zheng were in attendance
BEIJING (Xinhua, April 19, 2022) – CCP Central Committee General Secretary, State Chairperson, Chairperson of the Central Military Commission, and Chairperson of the Central Commission for Comprehensively Deepening Reform (CCCDR), Xi Jinping presided over the 25th Meeting of the CCCDR on the afternoon of April 19, where the following were deliberated and passed: Guiding Opinions on Strengthening the Building of Digital Government, Guiding Opinions on Further Advancing Work on the Reform of Fiscal Systems at and Below the Provincial Level, Opinions on Establishing and Improving the Leading Cadres Natural Resources and Assets Outgoing Audit Evaluation Index System, Work Plan for Improving Financial Support for the Innovation System During the Fourteenth Five-Year-Plan Period, and Several Opinions to Improve Incentive Mechanisms for Science and Technology.
While presiding over the meeting, Xi Jinping emphasized the need to comprehensively implement the Cyber Superpower Strategy; apply digital technologies extensively to government management services; advance the digitized and intelligentized operation of government; and offer robust support to advancing the modernization of the country’s governance system and governance abilities. It is necessary to rationalize the fiscal relationships between local governments at and below the provincial level; bring about a more reasonable allocation of rights and obligations, a more standardised division of revenue, and a relatively balanced distribution of fiscal resources; promote and accelerate the building of a large unified national market; advance toward making uniform the provision of basic public services; and promote high quality development. It is necessary to enact the principles of adhering to laws and regulations, objectivity and impartiality, scientific determination, correspondence between rights and responsibilities, and life-long accountability;2 focus on building a scientific, standardized, and reasonable audit and evaluation index system; and push leading cadres to diligently fulfill their duties of natural resource and asset management and environmental protection. It is necessary to focus on shortcomings and weaknesses in the financial services for science and technology innovation; improve financial support for the innovation system; and encourage the financial system to better adapt to the demands of science and technology innovation in the New Era. It is necessary to persist in facing the frontiers of the world’s science and technology as well as the main economic battleground,3 and in catering to the nation’s great demands as well as the healthy lives of the people; establish guiding incentives [for science and technology personnel] to boldly shoulder the nation’s mission, devote themselves to research, and create value; build an innovation ecosystem favorable to the continuous emergence of original achievements, and to the efficient conversion of science and technology achievements [into practical applications]; incentivize all science and technology personnel to fully exhibit all their capabilities and talents.
Li Keqiang, Politburo Standing Committee Member and Deputy Chairman of the CCCDR as well as Wang Huning and Han Zheng were in attendance.
At the meeting, it was pointed out that reinforcing the construction of digital government is an important action in innovating on the concept and method of governance, and has profound relevance to accelerating the transformation of government functions and to building a government ruled by law, a clean and honest government, and a service-oriented government. Since the 18th Party Congress, the Party Central Committee has made a series of major deployments, centered on implementing the Cyber Superpower Strategy, the Big Data Strategy, etc.; every aspect of this work has attained new progress. It is necessary to uphold and strengthen the Party’s total leadership permeating every domain and every element of building digital government and to uphold the correct political orientation. It is necessary to take the people’s yearning for a beautiful life as both the starting point and destination for the construction of digital government, and create a digitized service system that is ubiquitous and accessible, intelligent and convenient, and fair and inclusive, so that the everyday person’s life is made easier by letting data do the work. It is necessary to aid in the transformation of government functions through digital reforms; advance overall the intensive construction of a government affairs application system for all industries and fields that is both mutually interconnected and interoperable; utilize the important supporting role digitization plays in government functions, such as the implementation of economic adjustments, market regulation, social management, public services, environmental protection, and so on; build and coordinate a highly efficient system with the capability for government to discharge its duties in a digitized fashion. It is necessary to strengthen the systemic way of thinking; strengthen the scientific and standardized system of digital government construction; according to laws and regulations, promote highly efficient data sharing and the orderly development and use of data; advance overall the integration of technologies, the integration of [government] business units, and the integration of data; improve the quality of coordinated management and service across hierarchies, regions, systems, departments, and [government] business units. The bottom line of data security must be tightly maintained from beginning to end,4 the construction of a digital government security safeguard system expedited in all aspects, and the responsibilities for digital government security management comprehensively strengthened.
At the meeting, it was emphasized that since the Third Plenary Session of the 18th Central Committee of the CCP, we have strengthened the top-level design of fiscal and taxation system reforms; reforms to delineate fiscal authority and accountability for expenditure between central and local governments are making deepening progress; income sharing between central and local government has been further rationalized; the reform of the Fiscal Transfer Payment System continues to deepen; rights and responsibilities are clear and fiscal resources are coordinated; and the regionally balanced fiscal relationship between central and local government is progressively taking shape. It is necessary to uphold the centralized and unified leadership of the Party Center, and, under the framework of principles for the Central and Local Government Tax Sharing System, to follow and strengthen the basic principles of Intergovernmental Fiscal Relations;5 to clearly define the fiscal authority and accountability for expenditure at and below the provincial level; to rationalize the intergovernmental revenue relations at and below the provincial level; to improve the Transfer Payment System at and below the provincial level; to establish and strengthen adjustment mechanisms for the fiscal system at and below the provincial level; and to standardize fiscal management at and below the provincial level. It is necessary to, by way of improving the fiscal system, get rid of local protectionism and eliminate market barriers; strengthen, maintain, and advance a guarantee system and a standards system for making uniform the provision of public services [in different localities]; increase the level of fiscal support given to old revolutionary areas, ethnic regions, border regions, and underdeveloped regions; improve regional supporting policies; and advance the construction of a long-term guarantee mechanism for county-level fiscal resources. It is necessary to, at all levels of local government, solidify risk prevention responsibilities;6 improve the long-term mechanism for preventing and alleviating the risk of hidden debt; firmly constrain the increase in hidden debt; and severely investigate and prosecute borrowing and financing which violates laws and regulations. It is necessary to have strict financial and economic discipline, protect financial and economic order, and strengthen financial and accounting supervision mechanisms.
At the meeting, it was pointed out that establishing the Leading Cadres Outgoing Audit System for Natural Assets and Resources, from the beginning of pilots in 2015, to the comprehensive launch in 2017, has created powerful systemic restraints within the strict implementation of the System of Ecological Civilization. It is necessary to improve the evaluation standards for leading cadres regarding their policy decisions and their supervision of [policy] execution in matters relating to resources and the environment, and integrate into the relevant evaluation indices the state of implementation of the Party Center’s major plans—protection of natural resources, the red line for ecological protection, the red line for protection of arable land, reduction of pollution and carbon, the system of persons in charge of rivers and lakes, and others. It is necessary to scientifically design the weightings within the evaluation index and the method for assigning scores; strengthen the leading role of critical targets, such as the physical quantity of natural resources and assets and the quality of the ecological environment; and give prominence to constraining targets related to resources and the environment, as defined by national plans. It is necessary to consider holistically the particularities of each region’s natural resource endowment, and that each region has a different classification under the Main Functional Areas system, and work hard to achieve scientific accuracy in configuring the index. It is necessary to standardize the scope and contents of audits, taking as a basis facts which are verified in accordance with the law, and ensure that the conclusion of audits and evaluations can withstand the test of history. It is necessary to advance mutual connectedness and coordination among all types of supervision7 and take the results of audits as important reference points for evaluations, appointments and dismissals, and rewards and punishments. Effective measures must be taken to guarantee the authenticity, accuracy, and completeness of related information and data, and strictly enforce responsibility for falsification of data related to resources and the environment.
The meeting emphasized that, to accelerate building a system of financial support for innovation, it is necessary to focus on strategic breakthroughs in critical core technologies, converting science and technology achievements [into practical applications], science and technology-based and innovation-driven small and medium-sized enterprises (SMEs),8 high-tech enterprises,9 and other key areas; deepen supply-side structural reforms of financing; advance the building of credit service capabilities for science and technology; improve the function of development-oriented and policy-oriented financial institutions so they serve innovation in science and technology within the scope of their roles; strengthen the ability of the banking industry and financial institutions to serve enterprises that undertake the nation’s great mission of science and technology innovation; improve the direct financing function10 of the multi-layered capital markets; utilize the risk sharing role played by insurance and financing guarantee mechanisms; strengthen the external financial backing provided to support science and technology. It is necessary to maintain bottom-line thinking11 and a problem-based orientation,12 and gain traction in guaranteeing the security and stability of the industrial value chain and the supply chain in the overall planning of financial support for science and technology innovation and precautions against financial risk, and in better solidifying the primary locus of accountability for the prevention and control of financial risk.
It was pointed out at the meeting that incentives for science and technology are an important guarantee for innovation and play an important role in unlocking the potential of science and technology innovation and stimulating the vitality of innovation. Science and technology personnel must be incentivized to fortify their sense of patriotism, harden their aspiration to serve the nation, and, of their own accord, to assume the great responsibility13 and contribute their efforts toward accelerating the construction of a science and technology superpower, and toward realizing a high level of self-sufficiency in science and technology. It is necessary to maintain a combination of both spiritual and material incentives and to focus on rewarding those science and technology groups and individuals who take as their starting point the nation’s urgent needs and long-term requirements, and those who make major contributions to science and technology progress, economic and social development, the nation’s strategy and security, and so on. It is necessary to innovate on the organizational and management mechanisms for scientific research programs and safeguard the working time science and technology personnel spend on scientific research, for innovation and creation without distractions.14 It is necessary to expand incentives for young science and technology personnel, to be willing to give young people the opportunity to lead the field, and to create an environment conducive to young talent attaining prominence through their endeavours. It is necessary to improve stable support mechanisms for the funding of scientific research, and unrelentingly support scientific researchers, in the direction of basic and public-benefit oriented research, to “spend 10 years honing a [righteous] sword.”15 It is necessary to persist in placing equal emphasis on incentives and constraints and to establish an effective system of constraint and supervision.
The members of the CCCDR were present at the meeting, and comrades responsible for related Party and State institutions were present at the meeting as observers.
1 省以下 “At and below the provincial level.” The Chinese is ambiguous as to whether the Provincial level is included. We have been guided by common sense and the official English translation of this term in the Party’s leading theoretical journal, Qiushi.
2 终身追责 “Life-long accountability” is an anti-corruption concept that refers to the idea that cadres are accountable for all of their actions in office, regardless of whether they have changed posting or retired. It aims to ensure cadres use their power according to law and to prevent behaviour like “corruption options” 腐败期权, in which cadres give favours to others while in office, then reap the benefits of those favours after leaving office.
3 面向经济主战场 “Face the main economic battleground” means that science and technology innovation, in order to be valuable, must be dynamically connected to gains in the real economy. It links to the importance of “transforming the achievements of science and technology [into practical applications]” 科技成果转化, often emphasised by China’s leaders. On October 5, 2020, Xinhua reported on comments Xi made to a gathering of scientists: “The reason science and technology innovation must face the main economic battleground, is because science and technology development is inseparable from the physical economy…science and technology innovation is not a self-sustaining cycle, it must maintain close ties with the physical economy,” “科技创新之所以要面向经济主战场，是因为科技发展离不开实体经济…科技创新不能自我循环，必须与实体经济保持密切的关系.”
4 始终绷紧数据安全这根弦: Literally, this means: “pull tight the root string of data security from beginning to end.” The sense is that data security must be highly tuned and a robust line of defence. The same phrase has been used in relation to preventative work against COVID.
5 政府间财政关系 “Intergovernmental Fiscal Relations.” This concept is explained at length in a lecture, entitled “China’s Central-Local Fiscal Relations,” given by Finance Minister Liu Kun 刘昆 on August 12, 2020, to the 13th National People’s Congress Standing Committee.
6 压实风险防控责任 “Solidify risk prevention responsibilities.” The term 压实责任 has become common in discussions of cadre incentives and discipline. The word 压实 literally means “to compact”; the concept seems to be to clarify responsibilities, in order to avoid cadres pushing accountability down the hierarchy. It connects to the mention of “life-long responsibility” 终身追责 at the beginning of the speech; in this case it is being linked to the management of local government risk and debt.
7 各项监督 "all types of supervision”: Xi has previously referred to four different types of supervision 四项监督 (discipline 纪律, inspection 监察, stationed 派驻, and touring 巡视) and the requirement that they are all connected and coordinated as one overarching supervision program.
9 高新技术企业 “High-tech enterprises” are enterprises in fields defined in “High-tech Fields for Priority National Support” 国家重点支持的高新技术领域. The concept is that enterprises in these R&D intensive, leading-edge fields will create China-based intellectual property, which is then converted into a new product, process, material or industry, and thereby supports the domestic innovation ecosystem.
10 直接融资功能 “Direct financing function”: Appears to refer to features of the capital market such as the Shanghai Stock Exchange STAR Market 上海证券交易所科创板 or 科创板 for short, established in July 2019 with the explicit aim to “serve enterprises of science and technology innovation that serve the national strategy.” This was an innovation in the financial system that sought to provide access to public capital markets for growth-stage, cutting edge companies which did not meet the stringent requirements for listing on the A-share market.
11 底线思维 “Bottom-line thinking”: The intended meaning is to plan for the worst outcome, while aiming for the best. It is likely an acknowledgement that science and technology in China may encounter further external impediments to progress.
12 问题导向 “Problem-based orientation”: As explained in a People’s Daily report from May 19, 2014, on Liu Yunshan’s speech about problem awareness and problem orientation: 人类认识世界、改造世界的过程，就是一个发现问题、解决问题的过程 “The process of mankind understanding the world and transforming the world, is precisely a process of discovering and resolving problems.” The idea is that China is in a new historical period 新时代, in which problems are ever more challenging; only by clearly and scientifically being aware of, studying and analysing the problems can they be solved; and only by solving problems can China make progress. The phrase connects to the renewed prominence in Party discourse of struggle 斗争.
13 担当作为 “Assume great responsibility [on behalf of the nation]”: This phrase is used most often in relation to cadres. It is a morally freighted term which imports two main ideas: first, that cadres must assume responsibility for the mission entrusted to them by the nation and people; second, that they must be effective in discharging this mission. Here, Xi is emphasising that, in order to achieve the goals of building a science and technology superpower 科技强国 and achieving a high level of self-sufficiency in science and technology 高水平科技自立自强, that the Party must incentivise and encourage sci-tech personnel outside of Party cadres to take on this mission and adopt this mindset.
14 Xi Jinping has referred to the danger of scientific researchers being distracted by bureaucratic formalism before. For example, in this speech (translation) on May 28, 2021, he refers to the proposal by the Central Committee in 1961 to protect valuable research time by “ensuring scientific and technological personnel have five days every week to do scientific research.” The reference to this event in 1961 is a pointed reference to the period leading up to China’s landmark achievement of Two Bombs and One Satellite 两弹一星, which is celebrated as a major breakthrough in China’s competitive scientific capabilities and national power. The indication is that China is once again in such a period now.
15 十年磨一剑 Literally: “take 10 years to grind a sword,” from a Tang dynasty poem, “The Swordsman” 《剑客》by Jia Dao 贾岛. The use of this image implies a call to action, a signal of an upcoming period of hard work and struggle, and a threat to those who would obstruct China. The sword is completed after many years of careful craftsmanship, and, once complete, can be used to rectify injustice. In this context, it could represent domestic intellectual property—the ultimate weapon in the present context of U.S.-China technology tensions—that China would create after many years of R&D. This IP must then be converted into material gains in order to build China’s comprehensive national power 综合国力.