BEIJING — China’s latest efforts in promoting “supply-side structural reform” is a timely strategy by the government to adapt to the current situation and open up new ways for economic development, overseas experts have said.
As the world’s second largest economy strives to sustain growth while the effectiveness of traditional demand-side policy support wanes, it is turning to the other side, the supply side, for new vitality.
At a recently concluded key economic meeting in Beijing, the government pledged to take steps to push forward “supply-side structural reform” in 2016 and beyond to support growth through new demand and productivity.
Overseas experts said that amid a great change of the global economic situation, the Chinese economy is gaining stream and unleashing great potential thanks to the new policy and relevant measures.
On the essence of “supply-side structural reform”, Peter Drysdale, economist and editor of the East Asia Forum at the Australian National University, said that with the decrease of a dividend in both population and resources, as well as the reduction in investment scale and marginal efficiency, China should raise productivity so as to improve economic benefits.
The reform aims to give full play to the role of the market, adjust the relationship between supply and demand, and lift the total factor productivity through such measures as fiscal and tax reform, structural adjustment, streamlining administration and delegating power to lower levels, and industrial innovation, he said.
Jeremy Rifkin, a renowned American economic observer, said China’s new economy has seen unprecedented opportunity for development thanks to a series of new policies and measures within the framework of “supply-side structural reform”.
Over the past year, he said, the Chinese government has put forward the “Internet Plus” action plan and stressed the construction of “ecological civilization,” adding that the Chinese society has showed great enthusiasm for “sharing economy” as the country is transforming into a “green digital economy.”
As China has conformed to the development trend of new industrial patterns, the country has potential to become a leader in such fields as e-commerce, green energy and modern logistics, said Rifkin, the author of the New York Times bestseller “The Third Industrial Revolution.”
Guo Shengxiang, dean of the Australian think tank Academy of APEC Creative Finance, said the macro adjustment in the supply side has a theoretical basis in economics.
China should also work out relevant policies and measures in accordance with its national condition to implement the reform, he added, saying the country’s “supply-side structural reform” is beginning to have an actual effect.
Guo said that in order to create a sound atmosphere for the development of new industrial patterns, the Chinese government has streamlined administration in e-commerce and other areas, strengthened fiscal and tax support, and normalized market order.
Simon Roberts, head of global equities at BNP Paribas Investment Partners, expressed his confidence in the Chinese economy, which he said has not showed a sign for big crisis.
He said his confidence is due to the fact that the slowdown of the Chinese economy has not affected social employment, as many industries in China have created more job opportunities than before.
In the opinion of Michael Hasenstab, manager of France’s Franklin Templeton Global Bond fund, the growth of China’s service sector is absorbing the labor force discharged from the traditional sector of heavy industry and manufacturing.
With the slowdown in the increase of China’s total labor force, he said, the expansion of the service sector is sufficient to support employment.
Moreover, China’s “supply-side structural reform” will help the Asian giant dovetail its development strategy with those of other countries.
Rifkin said China is advancing together with the world in transforming into new economy, noting that the “Internet Plus” action plan shares the same aim with the “Digital Europe” strategy of the European Union.
In addition, he said, China-proposed Belt and Road Initiative has provided a broader vision for deepening cooperation between China and other countries in Asia and Europe.