Tianjin should push forward supply-side structural reform to provide it with more impetus for growth, said Huang Xingguo, acting Party chief and mayor of the northern port city.
He said reform should focus on innovation and expanding high-level and green supplies.
According to local statistics, Tianjin’s gross domestic product grew 12.4 percent annually on average during the 12th Five-Year Plan period (2011-15).
The city’s GDP hit 1.65 trillion yuan ($250 billion) in 2015, with per capita GDP of more than $17,000. In the first quarter of 2016, GDP increased by 9.1 percent year-on-year.
Thanks to supply-side structural reform, Huang said Tianjin has a relatively good economy and plans to push upgrades in 10,000 local enterprises this year.
Businesses are encouraged to upgrade their equipment and technology through financing or leasing.
About 12,000 companies will be closed or cut production capacity due to low efficiency, low competitiveness and high pollution, according to the mayor.
The city’s government will also find ways to help businesses cut costs by as much as 48 billion yuan annually, Huang said.
“It’s hard to imagine a country’s or a city’s economy breaking down. The real economy is the foundation of the virtual economy such as the internet and finance,” Huang said. “We are following the nation’s top authorities and have already found ways to help cut enterprise costs through such measures as tax reductions.”
To ensure supply quality, Tianjin is working hard to boost emerging industries, technological innovation and advanced services and will encourage companies to upgrade technologies, improve business operations and optimize their industrial structure, Huang said. He added that Tianjin’s total fixed-assets investment would increase by more than 12 percent this year.
Statistics from the city’s development and reform commission show that 603 large projects－with investment of more than 50 million yuan for each and 300 billion yuan in total－were launched in the first quarter of this year, in the fields of manufacturing, infrastructure and services.
Huang said Tianjin needs not only big projects to drive local economic development but also smaller ones to meet consumer demands in a more personalized way.
He said Tianjin should boost the development of small and medium-sized science and technology enterprises.
The city currently has 72,000 SMEs in science and technology, including 3,400 influential tech firms. The mayor expects Tianjin could accommodate 100,000 SMEs in those fields, including 5,000 nationally recognized tech firms.
Huang said Tianjin would develop a real estate market to make better use of its idle buildings, offering venues for quality service companies.
At the same time, the city would focus on green manufacturing projects and, by studying circular economies in other regions, try to recycle its resources, Huang said.
The mayor said Tianjin would also highlight the hiring of professional personnel through talent recruitment and training programs.
“We are open to various new development concepts for boosting our own growth,” Huang said, adding that the main part of supplyside structural reform is reforming “our systems and mechanisms”.
The mayor said Tianjin should also cut bureaucracy, rein in government spending, improve regulations, optimize services, facilitate investment and trade and help improve residents’ quality of life. He said government measures include streamlining administration with an “approval with one seal” practice and setting up a Binhai New Area administrative approval bureau, so that businesses could rapidly complete their registration and approval procedures.
“These are new measures closely related to Tianjin’s supply-side structural reform,” said Zhou Liqun, head of the Nankai University’s Binhai Development Research Institute. “Streamlining government administration isn’t enough. We also need to stimulate reform through opening-up.”
Zhou cited the newly established Tianjin Pilot Free Trade Zone as an example of how to advance reform through opening-up.
“The free trade zone allows local companies to further go global while attracting businesses from all over the world, which requires the government to improve its administration and services according to international norms and standards,” he said.
The Tianjin mayor said mass innovation and entrepreneurship are effective ways to promote supplyside structural reform.
Huang said Tianjin has a relatively good environment for people to start their own businesses and innovate.
He said Tianjin made remarkable progress in this aspect last year by reforming its business registration system to facilitate business startups and by building maker spaces for innovation and entrepreneurship.
The Binhai CBD Area of the Tianjin Pilot Free Trade Zone is the major venue for mass innovation and entrepreneurship with 11 maker spaces, according to the mayor.
He also said the Tianjin municipal government has set aside 6 billion yuan as a risk compensation fund for bank lending to micro and small enterprises.
According to Tianjin’s 13th Five-Year Plan (2016-20), the city aims to become an industrial innovation center with national and international influence.
Huang said to achieve this goal, Tianjin should follow an innovation-driven strategy to boost local development.