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By Zhang Junkuo, DRC

2016-11-08

Currently, positive factors propelling China’s economic growth is increasing, and economic operation is becoming more stable, which can be illustrated in the following facts. 1. The fall of economic growth has become eased, showing a stable performance trend. 2. Market demand is improving, and consumer demand is growing together with a recovery in investment and an easing decrease of import and export. 3. Business environment and benefits have been fleshed out with a rebound in prices of manufactured goods, achievements made in the supply side adjustment and a decrease in the comprehensive costs of enterprises. 4. Market expectations have taken a turn for the better.

However, the foundation for smooth economic growth is not solid enough. 1. The new engine driving economic growth is not strong enough to play a leading role in economic development. 2. The tasks of resolving conflicts and accelerating the structural optimization and upgrading are still arduous. 3. Improvements are to be made through reforms in key areas and sectors, such as the financing and investing system relating to infrastructure construction in urban and rural areas, the regulations for granting land use approval for rural construction, the effectiveness of government rules and regulations and an orderly market order, and some other high-costs issues relating to energy, capital and logistics. These problems all call for institutional support.

Since the 18th CPC National Congress, the Central Government has expressed strong determination and exerted greater efforts to push forward reform. Issues relating to the following four aspects need to be handled well for further reform. 1. The relationship between the reforms of supply and demand sides should be properly dealt with. Supply side reform should be the main player and reforms to fully release the demand side potential should be vigorously promoted. 2. The relationship between government and market should be treated in an appropriate manner. The market mechanism should be given more play in optimizing the structural adjustment and letting market competition determine which businesses could survive. The government should strictly implement related standards, and manage employment and risks well. 3. The relationship between top-level design and grassroots pilot practice should be correctly handled. The reform measures formulated by the central government should be thoroughly carried out, and local governments should be encouraged to boldly make innovations and pilot practice. 4. With regard to personnel management system reform, the incentive and restraint mechanism should be properly implemented.