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New engines to drive the economy

Updated: Aug 31,2015 3:47 PM

As China is witnessing a new round of economic reform and transformation, the government is making great efforts to boost the economy by streamlining administration and delegating power to lower-level governments, promoting mass entrepreneurship and innovation, and advocating Internet Plus, which have been repeatedly stressed at State Council executive meetings.

Streamlining and delegating to bring reform dividends

To create a better environment for commerce and business, the government has been expanding reform by streamlining the administration and delegating power to lower-level governments.

Chi Fulin, director of the China Institute for Reform and Development, noted that streamlining administration and delegating power to lower-level governments are the biggest highlights as the central government moves to advance reform to a higher level and local governments are making public their power lists.

E-commerce is one of the fields that benefits from the streamlining and delegating efforts as the government relaxes restrictions and market access by limiting administrative intervention.

According to Wang Tao, chief economist at UBS Securities in greater China, said that streamlining administration and delegating power to lower-level governments are a long-term mechanism that will transform government functions and encourage technological and commercial innovations.

Mass entrepreneurship and innovation to stimulate social vitality

Another significant measure promoted by the State Council is to inject more dynamism and innovation into the economy through a greater focus on mass entrepreneurship and innovation.

At an executive meeting presided over by Premier Li Keqiang on Jan 14, a decision was made to establish a venture capital fund to support innovation-based companies that are in their early stages.

In addition to financial support, manpower resources are also needed as the State Council has cancelled restrictions that can hinder the free flow of talent.

Song Li, director of the Institute of Economics at the National Development and Reform Commission, said that in order to promote mass entrepreneurship and innovation, government should provide better public services and goods while the market plays its role in allocating resources.

Internet Plus to promote economic transformation and upgrade

Internet Plus, an initiative to integrate the Internet with other industries, will play a significant role in boosting and upgrading the economy.

The notion of Internet Plus promotes the integration of Internet technology with the manufacturing industry, enabling the road to further development in the government’s “Made in China 2025” initiative.

In addition to the manufacturing industry, emerging industries such as e-commerce is also an important part of the Internet Plus initiative.

Statistics show that e-commerce trading volume reached 16.39 trillion yuan ($2.57 trillion) in 2014, a 59.4 percent increase year-on-year. Online retail sales volume witnessed a 38.6% increase year-on-year in the first half of 2015.

Aimed at supporting the Internet Plus initiative, the government has decided to speed up construction of a high-speed broadband network to lower the costs of entrepreneurship and innovation.

Wu Hequan, a member of the Chinese Academy of Engineering, said the move will create an easier environment for mass entrepreneurship and innovation.

Under the Internet Plus initiative, foreign trade will also see an improvement in the form of a growing cross-border e-commerce.

Huang Songping, spokesman for the General Administration of Customs, said cross-border e-commerce will grow as Chinese foreign trade enterprises are strengthening their international capacity cooperation.