China outlines supply-side structural reform plan
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E-mail Xinhua, March 7, 2016
Sun Zhiming, director of the institute of economics of Jilin Academy of Social Sciences, believes the service sector in the northeastern region has development advantages, such as the region's winter tourism industry. Although the short-term investment is big, profits can be generated for the long run. "Besides tourism, the aviation industry, high-end equipment manufacturing and biochemical engineering could all be new growth engines for the northeast," Sun said.
East China's Jiangsu Province is also focusing on intelligent manufacturing with the aim of becoming an advanced manufacturing base with global competitiveness.
Deputies to the annual session of the National People's Congress (NPC) suggested that, in addition to adding new engines, supply-side reform needs to do some subtraction. Cutting overcapacity, de-stocking, de-leveraging and reducing costs were all listed as major tasks of reform.
According to a five-year supply-side reform plan for Guangdong released on March 1, all "zombie" companies in the province will be cleared out in three years. Shanxi Province plans to cut its coal production by 258 million tonnes by 2020, while Hebei Province aims to contain its steel and cement capacities to 200 million tonnes each.
The burden on companies will also be alleviated. NPC deputy Zong Qinghou, chairman of the beverage company Hangzhou Wahaha Group, suggested that more taxes and costs of enterprises should be cut to help the real economy.
According to Saturday's government work report, the government will pursue a more proactive fiscal policy, with an increased deficit to cut taxes and promote effective investments.
Analysts believe there will be further measures carried out nationwide following the annual sessions of the NPC and the CPPCC National Committee. With different focuses, together they will help combat an ongoing economic slow-down in the country.
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