Problems can't dim bright economic outlook
- By Gao Liankui
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E-mail China Daily, January 19, 2016
Also, Chinese enterprises are emerging as big players in electric vehicle manufacturing. For instance, at a recent contest in Melbourne, Australia, a luxury travel bus developed and made by a Chinese automaker created a Guinness world record by proving it can travel 1,018 kilometers after charging just once.
Besides, China's "Internet Plus" strategy has proved very successful and still has a lot of potential for further development. For example, companies offering vehicle-hiring services with the help of the Internet have considerably lowered the transport costs for ordinary passengers and, to some extent, mitigated the pressure on public transport.
Therefore, in its bid to eliminate backward overproduction, China should not resort to a rigid approach. True, serious overproduction in certain sectors such as coal and steel are yet to be addressed. But that does not pose a big problem to home appliance and electronics enterprises, because they can transfer their overcapacities from the saturated eastern region to the less-developed central and western regions. Also, there is no need to worry about overproduction in textile and shoe-making sectors, because many of them have been transferred to Vietnam and African countries. That the overcapacities in these sectors can be transferred makes it unnecessary to continuously try to offload them.
Although some of China's traditional sectors face difficulties, some emerging enterprises are booming. So, whether the government can create a macro-economic policy environment for their further development will be key to whether they can realize smooth upgrading and transformation.
Since many domestic enterprises have encountered financial difficulties-or their high costs have seriously restricted their development-the Central Economic Work Conference's promise to lower the costs is very important, as the temporary difficulties many domestic enterprises face can be traced back to their high costs in most cases.
To effectively increase supplies, China should try to increase government supplies-apart from making efforts to increase those by enterprises because the supply of public products by the government will boost the country's economic development.
The author is a researcher with the School of Economics, Renmin University of China.
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