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Key factors in China’s economic growth: reform and structure

Updated: Apr 13,2016 3:01 PM

“Strengthening supply-side structural reform is a major task for China’s economic work this year,” said Ning Jizhe, head of the National Bureau of Statistics.

“Supply-side structural reform, put forward in accordance with China’s current economic situation, includes adjustments in both product mix and enterprise structure,” he said.

The main tasks for supply-side structural reform this year are clear: tackling overcapacity, de-stocking, de-leveraging, lowering corporate costs, and improving weak growth areas.

The two strategies for reducing excess capacity and inventory are complementary, and “de-leveraging” means helping regional governments and enterprises address debts and then prevent financial risks, he explained.

“The first three tasks complement each other,” Ning said. “The government should keep an eye on issues related to employment and resettling laid-off workers when undertaking the tasks, and try to avoid negative impacts,” he added.

As for cutting down companies’ costs, the government should adopt steps to reduce the transactional costs brought by the system, transform the government’s functions, streamline administration and delegate power to lower levels.

In respect to shoring up weak spots in the economy, “We should enhance supply, technical skills and service quality in major infrastructure and public services,” Ning said, adding that taking targeted measures in poverty alleviation is another important way to improve weak links.

Boosting mass entrepreneurship and innovation will be a significant measure for both supply-side reform and innovation-driven development. “What we need to do is to remove the institutional obstacles and eliminate barriers in accessing funds, technology and information, to create a sound political environment for the entrepreneurs,” he said.

He said that local governments should establish enterprise funds, promote financial reforms and support business incubators to help with new business startups.

The mass entrepreneurship and innovation strategy will be implemented in many sectors, including technology, economy, administration and society. “Not only grass roots, but also elites, should get involved,” Ning added.