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By Li Wei, DRC

2016-12-13

At present, one of the most profound structural problems of China’s economy is that there is the disconnection between virtual and real economy. The fundamental goal of supply-side structural reform is to foster the formation of new engines for economic development and realize the optimization and adjustment of economic structure by reforming and improving the institutional mechanism. And efforts should be made in the following aspects.

First, real economy should be strengthened, optimized and promoted. 1. The aggregate scale of manufacturing industry should be expanded. 2. The quality of manufacturing products should be boosted. 3. Efforts should be made to adapt to the approaching momentum of new technological revolution.

Second, a sound ecological environment for innovation should be established. 1. Work should be done to establish a standardized and fair competitive environment and strengthen the external pressures and internal impetus for enterprises to make innovations, through powerful market regulation, effective intellectual property rights protection and the removal of irrational monopoly pattern. 2. We need to establish an innovative system through reform, enhance original innovative capacity, and improve educational system through innovation. 3. We need to flesh out financial and taxation system as well as government performance evaluation system and encourage governments of all levels to take innovation as the fundamental impetus to push forward economic development. 4. We need to establish a system to encourage people to make creative work and ensure that workers who participate in creative work could receive appropriate+ income that can match their devotion.

Third, we need to increase market demand for the development of real economy. 1. We need to raise the proportion of labor remuneration in the distribution of national income and bring into play the role of domestic consumption in propelling industrial upgrading. 2. We need to enhance the industrialization and urbanization in central and western regions so that these regions could consume more domestic products. 3. In the context of globalization, vigorous efforts should be made to explore ways and methods to create market opportunities for the development of strategic emerging industries.

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