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Reforms key for attaining China’s economic goals

Updated: Jan 5,2016 7:20 AM     Xinhua

BEIJING — With a strong resolve to deepen reforms and a clear grasp of its priorities, the Chinese government is on the right path toward countering downward pressure for growth and realizing major economic goals for the next five years.

The country’s economy has been mired in a protracted slowdown in the past few years, mainly due to faltering global recovery and weak domestic demand, with GDP growth for the third quarter of 2015 falling to a six-year low of 6.9 percent.

The purchasing managers’ index for the manufacturing sector has hovered below the boom-bust line of 50 for five months in a row as of December, pointing to continued downward pressure, according to data unveiled on Jan 1.

Realizing the fact that China’s economy has entered a “new normal” state featuring slower growth, the government has intensified reforms to raise growth quality and efficiency and pursue more balanced and sustainable growth.

Since early 2014, China cut red tape and lowered entry requirements for enterprises, including lifting restrictions on minimum registered capital and cash ratios of registered capital, leading to a surge in newly registered companies and a new wave of entrepreneurship and innovation.

Last year, the country also continued reforms to optimize economic structure, make the economy more market-oriented, and reduce the burden of companies, especially small and medium-sized enterprises.

As the government begins planning for the next five years, it confirmed the goal of realizing medium-high economic growth and showed keen resolve to continue major reforms.

One proof of the government’s strong reform push is the speed of ending the one-child policy that existed for decades.

China rolled out the “one couple, two children” policy two months after announcing the decision to end the one-child policy. All couples are allowed to have two children beginning in 2016.

For the next five years, China will target medium-high growth to make sure that it can double both its 2010 GDP and the per capita income of rural and urban residents by 2020, which requires an average annual growth of more than 6.5 percent.

The country will also promote greater sophistication in the industrial sector, raise consumption’s contribution to growth and the urbanization ratio, as well as bring all rural people out of the poverty by 2020.

In 2016, China is expected to keep economic growth in a reasonable range and pay more attention to structural reforms on the supply side, which can create a better environment for sustaining long-term economic growth, as part of its innovative, coordinated, green, open and shared development model.

Priorities for this year are based on the elimination of outdated capacity, alleviating the burden for firms, reducing property market inventory, raising efficient supply and defusing financial risks.

Although reforms are not going to be finished in a day, the country is making firm steps toward accomplishing the goal of building a moderately prosperous society by 2020.

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