China strives to step up supply-side structural reform

Ministries and commissions at all levels have made arrangements for supply-side structural reform, with stress on cutting overcapacity, promoting manufacturing upgrades, and reducing costs, which sets the course for the government in 2018, People's Daily reported on Feb 23.

Weeding out overcapacity, fostering new growth engines with innovation and technology, and lowering institutional costs are indispensable backbones for supply-side structural reform, according to Zhang Liqun, a researcher at the Development Research Center of the State Council.

In 2017, China phased out its steel production by 50 million tons, coal capacity by 150 million tons and 50 million kilowatts of coal power. Meanwhile, according to a report released by the World Intellectual Property Organization, China has been persistently climbing up the global manufacturing value chain.

Additionally, preferential taxation policies implemented in 2017, featuring VAT reform, streamlining tax rates, and regulating fees, greatly eased enterprises' burden by 1 trillion yuan, well beyond the annual target.

This year, slashing overcapacity, manufacturing upgrading, and cost reductions are high on local authorities' agenda. For instance, Tianjin is planning to weed out 260 under-productive enterprises and impel manufacturing upgrading, while Sichuan province will continue to step up streamlining administration and delegating powers in the hope of achieving a 50-billion-yuan tax cut for enterprises.

In addition, a slew of support policies have come to the fore. The National Development and Reform Commission will push forward all-around cost reductions, and the Ministry of Industry and Information Technology will navigate regional authorities through the course of cutting overcapacity.

Ministries at all levels should propel supply-side structural reform, amplifying valid supplies and cutting down business costs, said Ning Jizhe, head of the National Bureau of Statistics.