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Xi calls for improved supply-side structural reform

Xinhua | Updated: 2017-01-23 08:31

BEIJING -- Chinese President Xi Jinping on Sunday called for the improving of the supply-side structure to boost the quality of the Chinese economy.

Xi made the remarks during the 38th collective study held by the Political Bureau of the Communist Party of China Central Committee.

He said that pressing ahead with supply-side structural reform was an inevitable choice for developing the Chinese economy, which had entered the "new normal," and was a strategy that had to be established for China's macroeconomic management.

Xi said that China had to improve the supply-side structure, starting with production to boost the quality and efficiency of the supply system, expand effective and medium-to-high-end supply, and increase the supply-side structure's adaptability to changes in demand, so the Chinese economy could move forward with improved quality, efficiency, equality and sustainability.

He said that currently constraints on China's economic development were mainly structural problems, existing in both supply and demand, adding that the main problem was on the supply side.

"To advance supply-side structural reform, China had to handle well the relationship between government and market," Xi said. "A major principle in promoting the reform is to let market play the decisive role in resource allocation and better play the role of government."

He said that the relationship between short term and long term also had to be well handled, stressing the importance of resolving existing prominent problems and building a long-term system and nurturing medium-to-long-term engines for economic growth.

"The relationship between addition and subtraction should also be well handled," Xi said.

He highlighed the need to cut low-end and non-effective supply, which includes cutting production capacity, destocking, and deleveraging.

Expanding effective and medium-to-high-end supply was also important, he said, including improving weak links, boosting the people's living standards, accelerating the development of new technologies, industries and products,

Xi also stressed the importance of handling the relationship between supply and demand, the two basic aspects of the market economy.

Chen Dongqi, a researcher with the Academy of Macroeconomic Research under the National Development and Reform Commission, delivered a lecture at the collective study and offered policy suggestions.

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