On the morning of March 5, 2023, the first session of the 14th National People's Congress opened in the Great Hall of the People, and Premier Li Keqiang delivered a government work report. There are several items of the report that concern the aggregates industry.

• It is proposed that 3.8 trillion yuan be allocated for special-purpose bonds for local governments this year to speed up the implementation of major projects during the "14th Five-Year Plan", and to encourage and attract more private capital to participate in the construction of major national projects and projects for strengthening weak links, and stimulate the vitality of private investment.
• The deficit-to-GDP ratio will be set at 3%. We will improve preferential policies for taxes and fees, and continue and optimize existing measures such as tax cuts and tax rebates.
• We will strengthen domestic exploration and development of mineral resources and increase reserves and production.
• We will accelerate the digital transformation of traditional industries and small and medium-sized enterprises, and strive to make them more high-end, intelligent, and green.
• We will promote the transformation and upgrading of traditional industries, foster and strengthen strategic emerging industries, and strengthen weak links in the industrial chain.

It is worth noting that the government work report has set the annual GDP growth target of around 5% in 2023. This year, we will prioritize quality and quantity in economic development, ensure housing, curb the increase in hidden local debt, and ensure stability while seeking progress.

Under the background of the country's requirement for stable economic growth, new and old infrastructures jointly support the economy. Sand and aggregates are the largest, indispensable and irreplaceable building materials for infrastructure construction. Demand for aggregates is expected to bottom out this year.

Here is the text of the government work report that most concerns the aggregates industry:

1. Expanding domestic demand

We should give priority to the recovery and expansion of consumption. The incomes of urban and rural residents should be boosted through multiple channels. We should stabilize spending on big-ticket items and promote recovery in consumption of consumer services. We should see that government investment and policy incentives effectively drive investment society-wide.

It is proposed that 3.8 trillion yuan be allocated for special-purpose bonds for local governments this year. Implementation of major projects set out in the 14th Five-Year Plan will be sped up. Urban renewal projects should also be launched.

We should promote complementary development between regions and see that each region fully leverages its strengths. We should encourage and attract more private capital into major state projects and projects aimed at addressing areas of weakness in order to stimulate private investment.

2. Accelerating the modernization of the industrial system

We should, with a focus on key industrial chains in the manufacturing sector pool quality resources and make concerted efforts to achieve breakthroughs in core technologies in key fields.

We should redouble efforts to explore and develop important energy and mineral resources, discover more reserves, and boost production. We should speed up the digitalization of traditional industries and SMEs to make them higher-end, smarter, and more eco-friendly. R&D and application of cutting-edge technologies should be accelerated. We should improve the modern logistics system. We should strive to develop the digital economy, step up regular oversight, and support the development of the platform economy.

3. Unswervingly consolidating and developing the public sector and unswervingly encouraging, supporting, and guiding the development of the non-public sector

We should deepen reform of state-owned capital and SOEs and enhance the core competitiveness of SOEs. We should continue with a category-based approach to reform and see that SOEs fulfill both their economic and social responsibilities and that they improve their modern corporate governance with distinctive Chinese features.

We should, in accordance with the law, protect the property rights of private enterprises and the rights and interests of entrepreneurs. We should encourage and support the private sector and private businesses in growing and expanding and support MSMEs and self-employed individuals in business development.

We should cultivate a cordial and clean relationship between government and business and create an environment in which enterprises under all forms of ownership can compete and grow on a level playing field. Effective measures and policies should be rolled out to boost market expectations and confidence.

4. Intensifying efforts to attract and utilize foreign investment

We should expand market access and continue to open up the modern services sector. We should ensure national treatment for foreign-funded companies.

We should take active steps to see China join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and accede to other high-standard economic and trade agreements, and steadily expand institutional opening up by proactively adopting relevant rules, regulations, management, and standards. We should continue to leverage the role of imports and exports in driving economic growth. We should improve services for foreign-funded companies and facilitate the launch of landmark foreign-funded projects.

With a vast and open market, China is sure to provide even greater business opportunities for foreign companies in China.

5. Effectively preventing and defusing major economic and financial risks

We need to deepen reform of the financial system, improve financial regulation, and see that all those involved assume their full responsibilities to guard against regional and systemic financial risks. We should ensure effective risk prevention and mitigation in high-quality, leading real estate enterprises, help them improve debt-to-asset ratios, and prevent unregulated expansion in the real estate market to promote stable development of the real estate sector.

To prevent and defuse local government debt risks, we should improve the mix of debt maturities, reduce the burden of interest payments, and prevent a build-up of new debts while working to reduce existing ones.

6. Strengthen infrastructure development

We should keep total grain acreage at a stable level, promote the production of oilseed crops, and launch a new drive to increase grain production capacity by 50 million metric tons. We should improve contingency plans for ensuring the provision of agricultural supplies at stable prices. We should ramp up the development of high-standard cropland, facilities for irrigation and water conservancy, and other agricultural infrastructure. We should invigorate the seed industry and support the development of agricultural science, technology, and equipment.

Rural industries with local features should be fostered to create more channels for increasing rural incomes. Our achievements in poverty alleviation should be consolidated and expanded to prevent large-scale relapse into poverty. Rural development initiatives should be advanced. We must meticulously and effectively carry out work related to the extension of rural land contracts for an additional 30 years.

7. Continuing the transition to green development

Pollution prevention and control should be intensified. We should improve urban-rural environmental infrastructure and continue to implement major projects for protecting and restoring key ecosystems. We should promote R&D for the clean and efficient use of coal and move faster to develop a new energy system. We should improve policies for green development, develop the circular economy, promote efficient and intensive use of resources, advance energy conservation and carbon reduction in key areas, and continue working to keep our skies blue, waters clear, and lands clean.

8. Meeting people’s basic living needs and developing social programs

We should improve the housing support system, support people in buying their first homes or improving their housing situation, and help resolve the housing problems of new urban residents and young people.

We should promote high-quality, balanced development and urban-rural integration of compulsory education, intensify efforts to develop vocational education, and continue to explore new ground in higher education. We should see that more quality medical resources are channeled toward the community level and more evenly distributed among regions.

We need to improve elderly care services and refine supporting policies on childbirth. We should protect the legitimate rights and interests of women, children, the elderly, and people with disabilities. We should see that service members and their families, ex-service members, and other entitled groups receive the benefits and subsidies they are entitled to.

We should develop cultural programs and the cultural sector. We should work to make social governance more effective. Workplace safety supervision should be strengthened, and disaster prevention, mitigation, and relief efforts should be bolstered.

We should fully apply a holistic approach to national security and advance the Peaceful China Initiative to a higher level.

Summary

At present, China’s aggregates industry has entered the fast track of high-quality development. Green and low-carbon concept has widely been accepted by the industry. Under the new situation, the development of the aggregates industry is full of opportunities and challenges. This year, the government work report "sets the tone" for the development of our industry in 2023. The demand for sand and gravel will bottom out, but the requirements for the high-quality development of enterprises are also getting higher and higher, "high-end", "intelligent"," "greening" and so on have become the "keywords" to guide the development of the industry! With the implementation of a series of policies involved in the government work report, the aggregates industry will usher in a year of accelerated change in 2023!