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Economy will remain on healthy track

By Xu Shaoshi | China Daily Africa | Updated: 2015-08-16 11:53

New thoughts and methods have been adopted to exercise macro-control, keeping things steady

In the general trend, China's economy has entered a "new normal", which features three characteristics - slower speed, structural optimization and change of engine. There is no change in the trend of the Chinese economy growing stronger. That should be attributed to the central government's wise assessment of the situation and persistency in carrying out reform and innovation.

First, new thoughts and methods were adopted to exercise macro-control, which guaranteed the steady and healthy development of the economy. Though faced with downward pressure, the Chinese government remained unaffected. It took certain macro-control measures to address the structural problems and the other most prominent problems that had surfaced in the economy's development.

Exercised within the reasonable limits of economic operation, these macro-control measures included specially targeted tax reduction, specially oriented deposit reserve ratio cuts and pledged supplementary lending, which were combined with the overall reduction of fees, taxes and the deposit reserve ratio to help enhance market demand, augment supply and improve growth quality.

Second, measures were taken to deepen the reform and encourage people to start businesses and promote innovation. In the accelerated reform of administrative-approval procedure, 600 items were annulled or delegated to lower authorities. Items related to enterprise investment that previously needed to be approved by the central authorities were cut by 76 percent, while 95 percent of items concerning foreign investment and 98 percent of items related with Chinese investment in overseas markets no longer need to be delivered physically to the pertinent departments but instead can be registered online.

The new "one license, one code" practice has been popularized to make it easy for companies to be registered. Last year, 1,293 new companies were registered with a total capital of 1.9 trillion yuan ($306 billion), nearly double the figures in the previous year. In the first five months of this year, 5.44 million companies were registered as startups, an increase of 15.4 percent. And the anti-monopoly moves taken by the government improved the market order and created a healthy environment for fair competition.

While continuing to encourage foreign investment, the government also took concrete measures to support Chinese companies to invest overseas. The Belt and Road Initiative greatly promoted international cooperation in productivity enhancement for mutual benefit.

Third, efforts were made to change the development model, which in turn brought about structural changes. In 2013, the added value generated by the service industry accounted for 46.1 percent of the nation's GDP, marking the first time the tertiary industry had surpassed the secondary industry in GDP proportions. In 2014, the end consumption accounted for 51.2 percent of the GDP, exceeding investment in terms of contribution to economic growth. These two developments were the most striking changes in the economic structure in recent years.

Meanwhile, the industry restructuring continued. Development of strategically important new industries and high-tech industries accelerated. Internet-based new industries and new products are becoming new growth engines. Moves have also been made to speed up the redistribution and upgrading of traditional industries. Positive results have been achieved in dealing with overproduction. During the four years between 2011 and 2014, production capacities of 77.77 million tons of steel, 600 million tons of cement and 150 million crates of glass were scrapped.

Changes to the country's regional structure made it more coordinated, with the development pattern of the East, Central, West and Northeast regions further optimized. With the launch of the Belt and Road Initiative, the Beijing-Tianjin-Hebei Coordinated Development project and the Yangtze River Economic Belt, a number of city clusters are becoming new growth engines.

The urban-rural structure is changing to become optimized. Moves have been taken to promote a joint development of the primary, secondary and tertiary industries in China's rural areas. Following the plan to help 100 million migrant workers to settle in cities, improve the living conditions for 100 million urban residents in shantytowns and encourage 100 million rural residents in mid-western regions to become urbanized locally, China has been accelerating construction of new towns.

The urbanization rate reached 54.8 percent in 2014. The expedited process of urbanization created ample space for China's economic development. China is drafting the 13th Five-Year Plan (2016-20) to determine strategic goals for the country's economic and social advancement in the next five years and an even longer time.

In conclusion, China's economy has great potential and elasticity, which gives it enough leeway to cope with various changes and challenges, and its general trend of steady growth remains unchanged. We are confident and capable of keeping the economic development on the healthy track and realizing this year's goals for economic and social advancement. China's economy is an important part of the global economy. Its contribution to global economic growth has reached 30 percent. A healthy development of the Chinese economy is a vital force to push the global economy toward full recovery.

The author is the chairman of China's National Development and Reform Commission. Courtesy: China & US Focus.

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