6. Using innovation to support and lead economic structural improvement and upgrading

Innovation is the motive force for adjusting and upgrading the economic structure. We need to make innovation the core of China's development endeavors, promote the full integration of science and technology with economic and social development, and elevate China's industries to the high range of the global value chain.

We will accelerate reform of the science and technology management system. We will strengthen the leading role businesses play in making technological innovation, encourage enterprises to set up research institutes, take the lead in establishing industry-academia-research collaboration in making innovation, and comprehensively implement preferential policies such as extra deductions for businesses' R&D expenses. More science parks and scientific and educational institutions will be covered by the trial reform policy that gives national innovation demonstration zones equity-based incentives for making innovation and the right to transfer and profit from their scientific and technological advances.

We will increase government spending on basic research and research on cutting-edge technologies, technologies for the public good and key standard technologies, and we will improve public science and technology service platforms and the mechanism for launching major science and technology programs. We will improve and strengthen the management of research projects and their funding, introduce the system of national innovation surveying and science and technology reporting, and encourage researchers and engineers to set up businesses. The protection and use of intellectual property rights will be strengthened. We will work to propagate scientific knowledge and foster a scientific spirit. We will fully implement the talent development plan, coordinate major programs for nurturing and attracting talent, and encourage the establishment of a mechanism to link researchers' pay with the market value of their research so that researchers' contributions are matched by their rewards. This will enable outstanding individuals of various types to come forth in large numbers, and their talent will be fully unleashed.

In making industrial structural adjustment, we will rely on reform and support growth in some sectors while curbing excess and outdated production capacity in others. We will support growth more vigorously. We will give high priority to developing production-oriented service industries, and carry out pilot and demonstration projects to advance the comprehensive reform of the service industry. We will integrate the development of cultural and creative industries as well as design services with related industries, and speed up the development of insurance, business, and science and technology services. We will promote full integration of IT application with industrialization, encourage businesses to accelerate technological upgrading, make management more precise, improve the policy for accelerating equipment depreciation, and make traditional industries more competitive. We will build a platform for supporting business startups and innovation in emerging industries. We will strive to catch up with and overtake advanced countries in areas of new-generation mobile communications, integrated circuits, big data, advanced manufacturing, new energy and new materials, and to guide the development of emerging industries.

We will curb excess and outdated production capacity in a more proactive and orderly manner. We will let market competition determine which businesses survive, and encourage business acquisitions and reorganizations. In industries with severe overcapacity, we will strengthen environmental protection, energy consumption, and technology standards; abolish preferential policies; absorb some excess production capacity and strictly control increases in production capacity. This year, we will reduce outdated production capacity of 27 million metric tons of steel, 42 million metric tons of cement and 35 million standard containers of plate glass. We will ensure that the target for reducing outdated production capacity set in the Twelfth Five-Year Plan is met one year ahead of schedule, and make sure that these reductions are permanent and such production capacity does not increase again.