What are the significant impacts of the six new proposals included in the government work report for the first time?

On March 5th, the “Government Work Report” (hereinafter referred to as the Report) was released.

The Daily Economic News reporter noticed that six new concepts were introduced into the government work report for the first time.

In terms of industrial policy, “Smart Economy” was included in the report for the first time. This is another industry form named after “economy,” following agricultural, industrial, and digital economies. In August last year, the State Council issued a document setting a goal: by 2030, the penetration rates of smart terminals, intelligent entities, and others should exceed 90%, making the smart economy a key growth pole for economic development. What are the key focus areas? The report highlights several directions: ultra-large-scale intelligent computing clusters, compute-electric synergy, public cloud, and satellite internet.

The report also details a series of arrangements for implementing income-increasing plans for urban and rural residents, including measures to promote income growth for low-income groups, increase residents’ property income, and improve salary and social security systems.

Additionally, the section on ensuring and improving people’s livelihoods is longer than before, with six paragraphs. It covers “strengthening housing security for newly married and newly parented families,” “improving maternity leave policies,” “enhancing measures to promote employment and entrepreneurship through AI development,” and “commercial health insurance.”

In healthcare, commercial health insurance is mentioned for the first time, with a focus on promoting high-quality development of innovative drugs and medical devices to better meet the diverse medical and medication needs of the people.

Regarding the report’s content, relevant experts provided insights to the Daily Economic News reporter (hereinafter referred to as NBD).

How are economic growth targets set?

NBD: The report states that the main expected growth target for this year is 4.5% to 5%, with efforts to achieve better results in practice. Compared to last year’s “around 5%,” what considerations are reflected in this range?

Yang Chang, Chief Analyst at the Policy Research Institute of Zhongtai Securities: The adjustment of this target at least conveys two meanings. First, given external uncertainties, there is some pressure on domestic economic growth, so a moderate downward adjustment helps avoid distraction and allows focus on high-quality development goals, maintaining momentum in structural transformation and new productive forces. Second, adopting a range management approach, with “around” 2025, provides greater flexibility, while the “4.5%~5%” range clearly signals a bottom line for growth, ensuring the economy remains stable as a clear goal, and providing signals for timely policy adjustments.

“Smart Economy” included in the report for the first time

NBD: “Smart Economy” is included in the report for the first time. What is the concept of a smart economy? What are its development ideas and main pathways?

Li Hao, Researcher at China Construction Investment Research Institute: The smart economy is a new economic form driven by artificial intelligence as the core force. It reshapes all aspects of economic activities—production, distribution, exchange, and consumption—through data, computing power, and algorithms. Its connotations include three levels: first, industrialization of smart technologies, forming independent clusters around AI, chips, and computing power; second, intelligent transformation of the real economy, upgrading manufacturing, agriculture, and services comprehensively; third, an intelligent ecosystem, including data flow, new human-machine collaboration models, and governance systems.

The core idea of developing a smart economy is to prioritize the real economy as the main battlefield, driven by technological breakthroughs, infrastructure support, and ecological construction—“three-wheel drive.” Main pathways include: first, leveraging “AI+” initiatives to promote large-scale AI applications in key industries like manufacturing and healthcare, cultivating native intelligent industries, and promoting smart terminal products; second, building new infrastructure to accelerate the development of intelligent computing clusters, compute-electric synergy, and satellite internet, strengthening computing support; third, ensuring data governance and open-source ecosystems, establishing robust data infrastructure, developing high-quality datasets, supporting open-source communities, and creating an open and secure industrial environment.

NBD: Which industries within the smart economy might contain huge markets?

Li Hao: Currently, the enabling effects of the smart economy are continuously releasing, creating systemic reshaping across the entire industry chain, not just single sectors. Specifically, three major areas hold enormous market potential:

First, next-generation smart terminals and intelligent entities. These are the direct carriers reaching users, with the most obvious market space. The report explicitly states to “accelerate the promotion of new-generation smart terminals and intelligent entities.” This includes consumer-grade products like intelligent connected vehicles and AI smartphones, as well as industry-grade products like embodied robots and smart medical devices. With the maturity of multimodal technology and hardware-software integration, future personal assistants and enterprise digital employees could become as common as current apps, with a software, model, and service market worth trillions of yuan.

Second, foundational technologies and facilities related to “new infrastructure.” These are the basic supports for the smart economy, with stable and lasting demand. Projects like “intelligent computing clusters,” “compute-electric synergy,” and “satellite internet” are expected to directly drive three subfields: first, AI chips and high-performance servers, especially demand for high-performance computing chips and edge computing chips; second, computing infrastructure and operational services, including data centers, computing resource leasing, and public cloud services; third, the entire satellite internet industry chain, including satellite manufacturing, launch services, and ground equipment.

Third, “industry-native” applications with deep empowerment. This is the main battlefield for value creation in the smart economy, with many segmented tracks. The report emphasizes promoting large-scale commercialization of AI in key industries. In smart manufacturing, smart factories and industrial brains will be essential; in modern services, AI will be deeply integrated into financial risk control, smart logistics, digital tourism, and other fields; in biomedicine, AI-assisted drug R&D will greatly improve efficiency. Meanwhile, data elements themselves form a large industry—developing high-quality datasets, facilitating data circulation and trading, and providing data security and privacy computing services will grow rapidly alongside the smart economy.

NBD: The report also proposes to improve measures that promote employment and entrepreneurship aligned with AI development. How should a systematic deployment be made to address AI’s potential to both create and replace jobs? What role can the government play?

Li Hao: To respond to employment changes brought by AI, the key is to build an adaptive employment support system that helps workers transition from old to new jobs. This requires coordinated efforts from government, enterprises, society, and individuals, with the government playing guiding, empowering, coordinating, and safety-net roles:

First, establish a monitoring and early warning system for employment risks. Currently, AI substitution is spreading from low-skilled to medium- and high-skilled jobs, affecting fields like finance, law, and basic programming. The government should accelerate building a national AI employment impact monitoring platform to assess job replacement rates and skill gaps in key industries in real time, and regularly publish risk reports. This can provide a window for policy intervention and worker retraining, shifting from passive response to proactive planning.

Second, develop lifelong learning and skill reshaping systems. Skill mismatch is a root cause of structural unemployment. In the AI era, the government should accelerate integrating AI literacy into education, promote universal AI education, establish “skills banks” and personal lifelong vocational accounts to accumulate and transfer training results, and promote industry-education integration to match training with market needs.

Third, explore establishing a social cost-sharing mechanism for transformation. The benefits of AI adoption by enterprises should be shared with society, rather than shifting all costs onto workers. The government should promote diversified cost-sharing mechanisms, such as tax subsidies or proportional levies, encouraging high-automation, high-profit companies to set up special funds for worker retraining and transitional living subsidies, avoiding transferring all transformation costs to workers.

Fourth, improve institutional safeguards for new employment forms. Laws and regulations must keep pace with technological changes. On one hand, issue guidelines on labor relations, clarifying companies’ obligations for democratic consultation and retraining when replacing jobs with AI; on the other hand, expand social security coverage to flexible workers, and provide public employment positions for vulnerable groups to safeguard livelihoods.

Three key areas for implementing “Income-increasing Plans for Urban and Rural Residents”

NBD: The report details a series of arrangements for implementing income-increasing plans for urban and rural residents, including measures to promote income growth for low-income groups, increase property income, and improve salary and social security systems. Why does the report focus on these three areas?

Fang Lianquan, Secretary-General of the Social Security Research Center at the Chinese Academy of Social Sciences: Because these are three critical directions for current income distribution reform and key measures to improve the national income distribution system.

First, promoting income growth for low-income groups. This aligns with the overall goal of “raising the low, expanding the middle, and capping the high” in income distribution reform. Increasing low-income residents’ income helps boost consumption willingness and preserves purchasing power.

Second, increasing residents’ property income. This aims to broaden income sources and diversify income channels beyond wages, including income from land and asset leasing, transfer, interest, and investments. Property income is an important space for residents’ income expansion beyond wages and operating income.

Third, improving salary and social security systems. This is a redistribution adjustment mechanism. For salaries, it involves improving minimum wage protections and reforming income distribution; for social security, it involves strengthening safety nets, raising basic pension levels, and enhancing income support for unemployed, low-income, and disabled groups. Through social security redistribution, residents’ income can be effectively increased.

Overall, these three aspects form the core of the income distribution and redistribution system.

NBD: What can the government do to promote income growth for low-income groups and increase residents’ property income?

Fang Lianquan: To promote income growth among low-income groups, the government should expand employment, ensure stable jobs, provide public welfare positions, and timely raise minimum wages.

To increase property income, focus on improving land use rights leasing and transfer systems—such as promoting leasing and transfer of rural contracted land rights, exploring transfer mechanisms for rural homestead use rights—to boost related rental income; also, create an environment for residents to earn from asset investments, like interest income, to activate existing assets and broaden income sources.

Adding “etc.” to the purchase and repurposing of stock commercial housing

NBD: Regarding the real estate sector, the report adds an “etc.” after “encouraging the purchase of stock commercial housing mainly for affordable housing.” Besides affordable housing, what other uses could stock commercial housing have?

Yen Yuejin, Deputy Director of the Shanghai E-House Research Institute: That “etc.” indeed opens up vast possibilities for the use of stock commercial housing. We can understand its deeper meaning from both narrow and broad perspectives.

Narrowly, it still focuses on “affordable housing,” enriching and refining the affordable housing system. Besides the common rental and public housing, it can include talent apartments, youth apartments, even specialized apartments for experts, or “one bed, one room” accommodations for city builders and managers. These are all about providing targeted housing support based on different needs, especially talent apartments that meet both residence and retention needs through flexible leasing and sale.

Broadly, the “etc.” encourages local governments to think creatively, exploring cross-sector integration and functional transformation of stock properties. Based on existing experiences, several interesting directions include:

Integration with public services: For example, Shenzhen has designated purchased stock housing as university dormitories to ease campus expansion pressures. It can be transformed into “job-seeker apartments” for new graduates, or staff dormitories to solve commuting and accommodation issues for nearby enterprises.

Integration with social needs: With aging, some properties could be converted into elder care facilities or health apartments; stock near hospitals could serve family members of patients, providing short-term “care housing” to reduce costs and utilize idle assets.

Integration with new market formats: For instance, vacant units or commercial spaces in communities could be converted into studios for filming or shared live broadcast studios, exploring new value as “production tools.”

Regional characteristics: Suburban markets could repurpose properties to meet the needs of delivery personnel, couriers, or other workers, offering affordable, well-equipped housing. Even activating idle properties into local特色民宿 (local-themed guesthouses) is a promising attempt.

In summary, the “etc.” in the report is a concise expression, but in practice, it requires local adaptation. Only by tailoring solutions to local demographics, industry needs, and development stages can these stock assets be truly revitalized, maximizing social and economic benefits. This is the core of the second part of the “purchase and repurposing of stock commercial housing.”

First-time mention of “housing security for newly married and newly parented families”

NBD: How to understand the report’s first mention of “strengthening housing security for newly married and newly parented families, and supporting multi-child families to improve their housing needs”?

Yen Yuejin: This can be understood on two levels:

First, “strengthening housing security for newly married and newly parented families” explicitly includes these groups as key support targets. They often have urgent housing needs, and policy tilt in this area provides a new direction for affordable housing work. These families especially need policy support now, and local governments are expected to actively study and implement relevant measures.

Second, “support multi-child families to improve their housing needs” continues and strengthens policies favoring multi-child families seen in some cities, such as support for housing loans. The national-level mention signals a more positive policy stance.

Overall, mentioning both “newly married/newly parented” and “multi-child” groups reflects policy considerations from fertility support and population development perspectives. It is expected that future policies will include targeted financial support, housing fund benefits, tax reductions, and other measures. The focus on “initial marriage and childbirth” indicates a shift toward upstream support, a notable highlight in this year’s housing policies.

First appearance of “maternity leave system” in the report

NBD: The report states that to “further improve people’s livelihoods,” measures should be taken to perfect the maternity leave system. A review of the past 20 years’ reports shows this is the first time “maternity leave system” appears in the Government Work Report. What areas of the current system need improvement?

Pan Helin, renowned economist and member of the MIIT Information and Communications Economy Expert Committee: The issues include uneven implementation of maternity leave across regions and sectors, especially in rural and informal employment where women often cannot access maternity benefits; the heavy burden on enterprises for maternity leave costs; gender inequality, with fewer or no paternity leaves; and insufficient supporting measures, leading many women to hesitate to take leave or have children due to job security concerns.

Improvements can be made by: enforcing maternity leave policies through regulations; sharing costs via government subsidies; expanding coverage to include flexible and rural women; strengthening enforcement and supervision to ensure enterprise compliance.

First mention of “commercial health insurance”

NBD: The report mentions “commercial health insurance” for the first time, emphasizing the promotion of high-quality development of innovative drugs and medical devices to better meet diverse medical needs. How is the current market penetration of “commercial health insurance”?

Senior Medical Insurance Expert Tian Haoling: Data shows that by December 2025, China’s commercial health insurance premium income will reach 977.3 billion yuan, with a compound annual growth rate over 20% in the past decade, but still below 1 trillion yuan, leaving about half the target unmet. The market still has room to grow. Problems include:

Uneven coverage: Most insured are middle-aged and young; coverage among those over 60 is less than 20%, and among those with illnesses even lower.

Product structure: Over 11,000 medical insurance products are available, but there is a clear shortage of high-end, long-term care, and special-drug coverage.

Limited depth of protection: Reimbursement ratios are low, and the role as a supplement to basic medical insurance is not fully realized.

NBD: What are the necessities and challenges of popularizing this insurance?

Tian Haoling: As a core pillar of China’s multi-layered medical security system, commercial health insurance is essential for high-quality healthcare development.

Filling the “coverage gap” of basic medical insurance: Basic insurance covers essential services, but excludes high-end diagnostics, special drugs, and expensive medical supplies. Commercial insurance can tailor products to cover these gaps, offering more choices.

Supporting medical innovation: Innovative drugs and devices require large investments and long cycles. Basic insurance cannot cover all, but commercial insurance can negotiate with pharma companies and establish payment mechanisms, facilitating marketization of innovative treatments.

Building risk-sharing mechanisms: With aging, risks like chronic diseases and long-term care increase. Commercial insurance can diversify risk through actuarial pricing, easing government and family burdens.

Challenges include: lack of awareness and understanding among the public; limited product diversity for specific groups; issues with quick reimbursement and settlement; and cross-departmental data sharing to support product development and risk management.

Overall, developing commercial health insurance is a systematic project that complements basic social insurance, with accelerated collaboration being the way forward.