At a key economic meeting held at the end of 2015, China’s policy makers pledged to take steps to push forward a “supply-side structural reform” in 2016 and beyond, supporting growth through new demand and productivity.
It is seen as an innovative move to guide the world’s second-largest economy under the “New Normal” and a proactive decision to make it internationally more competitive.
SOUNDBITE2(CHINESE) ZHANG YONGJUN, China Center for Int’l Economic Exchanges
“The supply-side structural reform will cut excessive capacity and improve the quality of China’s economic development. It will also become a new driving force for growth.”
Experts say China’s push for a supply-side reform is markedly different from the massive stimulus policies in the past.
As China’s economy enters a “new normal” of slower speed but higher quality growth, economists say, flooding stimulus measures would boost growth in the short term but will not help the economy’s long-term development, while risking huge waste.
SOUNDBITE1(CHINESE) ZHANG YONGJUN, China Center for Int’l Economic Exchanges
“Massive stimulus measures will not be as effective as those in the past, which is why the government is focusing more on the supply-side structural reform.”
The supply-side reform will put more emphasis on structural adjustment and innovation in technology, which in turn could make the economic structure more efficient.
SOUNDBITE3(CHINESE) XU CHAOYANG, University of Int’l Business and Economics
“By launching the supply-side structural reform, we will make effective use of production factors, and effectively boost growth on the demand side”
In addition to structural adjustment, experts say China’s supply-side reform will solidify sustainable development of its economy in the long run.