China will increase its gross domestic product (GDP) by approximately 7 percent and keep the increase in the consumer price index at around 3 percent, says Premier Li Keqiang's government work report delivered at the Third Session of the 12th National People's Congress (NPC) on March 5. Lowering the growth target from 8 percent, which China maintained for several years before 2012, is a reasonable adjustment in the global economic and political situation.

A major reason for this adjustment is the profound changes in the demand-and-supply situation in the labor sector. As there is a decrease in new labor, the lower economic growth will not significantly affect the employment market.

Another reason is that the world is entering a phase of relative depression that might last for a long time. If China tried to stick to the high growth rate, it would have been difficult and the nation would have had to pay a high price. Instead of high growth, China needs to put more energy into income distribution and social equity.

"We must be adamant in pursuing economic development as our central task and do a thorough job of development as the top priority for ensuring the governance and revitalization of the country," the report says. This is a very important statement.

The data in the report indicates research and development spending accounted for over 2 percent of the GDP in 2014. In 2010, it was 1.76 percent. The 2 percent is a milestone achievement, indicating input in science and technology development has increased in recent years. Under the current market economic system, enterprises are the major power in the development of science and technology as well as the major investor.

The report projects the government's budget deficit for 2015 as 1.62 trillion yuan ($261.3 billion), an increase of 270 billion yuan ($43.54 billion) over last year, which means the deficit to GDP ratio will rise from last year's 2.1 percent to 2.3 percent.

Of this amount, the central government deficit will account for 1.12 trillion yuan ($180.6 billion), an increase of 170 billion yuan ($27.42 billion), while the local government deficit will account for 500 billion yuan ($80.6 billion), an increase of 100 billion yuan ($16.13 billion). This deficit is at a low level among large economies, leaving enough leeway for a possible sharp decrease.

As for streamlining administration and delegating more power to lower-level governments and society in general, I have a suggestion: new enterprises don't need to pay tax for the first two years. In the next three years, they can pay only half tax. This will not affect the revenue too much because new enterprises don't pay a large amount of tax in the first few years.

China is the only country in the world that meets all the categories of the UN International Standard Industrial Classification (a system of classifying industries by using a four-digit code). This advantage is incomparable. That is why Steve Jobs said it is "unimaginable" to move the factory of Apple back to the United States.

The stable development of the macroeconomy is another major advantage of China. Although some have voiced pessimism about China's growth, the solid fact is that China's economic growth has not shown huge ups and downs like in other countries.

The inflation rate in China is not high either. So the financial situation of China is generally better than other large economies, and this has provided more possibilities for the Chinese Government's macroeconomic regulation and control.

A longer industrial life cycle is another major advantage of China. Some prime industries still maintain vitality after being moved from the east to the undeveloped west. The Chinese Government's regional development policy will help make better use of this advantage.

The continuous growth of China's comprehensive economy has brought more value to the "Made in China" label. This is what is needed for upgrading industries. Only when a country has the world's most advanced technology will its products be accepted and purchased by most customers.

If in the past China was not strong enough to build up such an image, now it is becoming more and more qualified to do so.

"China is the largest developing country in the world; it is still in the primary stage of socialism, where it will remain for a long time to come," the report says. "At this stage, development is of primary importance - it is both the basis of and the key to solving every problem we face. In order to defuse problems and risks, avoid falling into the middle-income trap, and achieve modernization, China must rely on development, and development requires an appropriate growth rate." I applaud this statement.

(The author is a researcher with the Chinese Academy of International Trade and Economic Cooperation)

Tasks for 2015

• Fixed Assets Investment

» 477.6 billion yuan budgeted by the Central Government» 800 billion yuan in railway construction» 8,000 km of railways to open» 27 new water conservancy projects to start construction» More than 800 billion yuan in major water conservancy projects under construction

• Agriculture and Rural Development

» Grain output above 550 million tons» 13.3 million hectares of cropland for subsoil improvement» 60 million rural residents to gain access to safe drinking water» 200,000 km of rural roads to be built or upgraded» More than 10 million rural people to be out of poverty

• Urbanization» 7.4 million units of government-subsidized housing to be built, including 5.8 million in rundown urban areas, a year-on-year increase of 1.1 million» 3.66 million dilapidated rural houses to be renovated

• Social Security

» A 10-percent increase in basic pension benefits for enterprise retirees» Monthly basic pension benefits for rural and non-working urban residents to be uniformly raised from 55 yuan to 70 yuan per person

• Medical Service

» Annual government subsidy for basic medical insurance for rural and non-working urban residents to be increased from 320 yuan to 380 yuan» Annual subsidy for government expenditures on basic public health services to be elevated from 35 yuan to 40 yuan per capita

• Environmental Protection

» 3.1-percent cut in the intensity of carbon dioxide» 2-percent reduction in both chemical oxygen demand and ammonia nitrogen emissions» 3-percent drop in sulfur dioxide emissions» 5-percent cut in nitrogen oxides

• Ecological Improvement

» 670,000 hectares of marginal farmland to be returned to forest» 6 million hectares of land to be afforested($1=6.12 yuan)

(Source: Report on the Work of the Government)