The primary task to boost the real economy in 2017 is effective market supervision, in order to rebuild consumers’ confidence in made-in-China products, an expert said in an interview with China Economic Times.

Xu Zhaoyuan, a researcher from the Development Research Center of the State Council, said consumers’ rights must be effectively protected and market fraud must be rooted out to create a market environment in which consumers “dare to buy”.

He said the top barrier now to manufacturing is lack of confidence, both by domestic and foreign consumers. It caused a dilemma for Chinese companies — companies have to produce low-quality products even if they are able to produce high-quality ones, because consumers do not believe in them and refuse to pay high prices.

Quality improvement is a new growth point for the manufacturing industry and real economy, he added, especially in the context of some industries’ output reaching a ceiling, such as coal, steel and household appliances, as people’s demand for life quality is rising. In addition, new industries — such as smart manufacturing and industrial internet — are also the new impetus.

The government should also help companies cut costs, he said. Many costs can be reduced, including taxes, administrative fees, energy and logistics costs.

“The cost of China’s manufacturing industry is relatively high in the international context,” Xu said. Some industries’ competitiveness is falling, and some are moving to other countries.

But not all costs need to be cut. For example, it is natural for labor costs and environment protection costs to be rising, as the economy matures.