SCIO briefing on China's current economic performance

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Speakers:
Yang Weimin, vice minister of the Office of Central Leading Group on Financial and Economic Affairs;
Wang Zhijun, director of Division One on Economic Affairs, the Office of Central Leading Group on Financial and Economic Affairs;
Cong Liang, director-general of the Department of National Economy, the National Development and Reform Commission;
Xing Zhihong, spokesperson of the National Bureau of Statistics and director general of the Department of Comprehensive Statistics of the bureau

Chairperson:
Xi Yanchun, vice director-general of the Press Bureau, State Council Information Office

Date:
July 27, 2017

The Wall Street Journal:

I have a question regardingsupply-side structural reform. The expert just mentioned that the capacity of the coal industry has dropped sharply. We noticed that coal enterprises made a profit of about 100 billion yuan in the first half of the year thanks to the cuts in coal capacity and the rise in coal prices. However, rising coal prices will result inrising costsfor the coal-based power industry and the losses of coal-based power enterprises reached nearly 100 billion yuan in the first half of this year. Asadecision maker are you aware of this problem? The cuts in capacity in one industry may exert negative impacts on other related industries. If possible, will you be taking measures to avoid this phenomenonas supply-side reform continues in the future? Thank you.

Yang Weimin:

This is a good question. We areaware of the relationship between the upstream coal industry and the downstreampower industries, irrespective ofsupply-side structural reforms.As coal prices rise, the profits of the coal-based power industriesmay decrease. This continues to be a difficult problem to solve during China's long-term economic development process.

Currently, coal prices have rebounded very quickly due to complicated factors. Therefore, the practice of cutting capacity duringthe previous stage may need some fine-tuning for the next step. We will makebetter use of the measures enacted forremovingZombie enterprises as well utilizingmarket and legal approaches. We will also make less use of administrative orders in the future capacity-cutting process. Capacity cuts aim to correct distortions in the allocation of elements, and through reform, establish a more normal market order in theupstream-downstream relationship. But it needs some time. The conflicts will gradually ease in the future process of dissolving excess capacity and disposing Zombie enterprises. Thank you.

Xi Yanchun:

Thanks again for the release. In the next days, we will invite other economic departments to attend the SCIO briefings introducing China's economic situation. Please stay tuned for more interview notices published on theSCIO APP. Thank you. That's all for today's press conference.

By Guo Xiaohong, Wang Qian, Li Xiaohua, He Shan, Huang Shan, Yuan Fang, Chen Xia, Li Jingrong, Zhang Rui, Wu Jin, Li Huiru, Zhou Jing, Wang Wei, Xu Lin, Duan Yaying, Zhang Liying, Gao Zhan, Cui Can

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