中国的首要任务是供给侧改革

At a meeting held over the weekend, the National Development and Reform Commission said 2016 marked the outset of the supply-side reforms, and the country has made headway in cutting industrial overcapacity, destocking, de-leveraging, lowering costs and improving weak links.

According to the NDRC, the past year has also seen a favorable change in the supply-demand relationship which has led to improved profitability for companies in the real economy.

NDRC director Xu Shaoshi said the next step was for the government to do more to help enterprises better manage their businesses according to market demand, including trimming power usage.

"In the next year, we should act in line with the actual conditions to consolidate this year's achievement and face up to challenges. More market-oriented and rule-based measures and technical standards should be adopted. If a company can manage its operation by relying on market regulation and make its own decisions, the government should not interfere. Just leave it to the market, to the enterprises to do these things."

To further promote supply-side reform, Xu Shaoshi said several measures would be adopted to control the expansion of production capacity, eliminate backward production capacity and fight against illegal activities.

He said the country will take concrete steps to further reduce trading costs so as to lighten the burden for enterprises.

China's policymakers started to press ahead with reforms on the supply side at the end of 2015 in hope of solving economic structural problems and fostering new growth engines, with demand-side support, such as investment stimulus, become less effective than before.

At a major annual economic conference last week, the country's policymakers decided to carry on with the reforms.

According to the tone-setting Central Economic Work Conference, to deepen supply-side structural reform, the country will expand reform measures to more areas: overhaul the supply-side of agriculture, revive the real economy and stabilize the property sector.

Economists suggest the effort to promote supply-side reform is in at the heart of China's economic reform endeavors.

Zhu Zhixin with the China Center for International Economic Exchanges says supply-side reforms have wide-ranging implications.

"Generally speaking, supply-side reforms should not only focus on a steady and sustainable development of the macro economy, but also address risks in the financial and real estate sectors, ensuring achievements of the reform play an enduring role in the country's development."

Yang Weimin with the Central Leading Group on Finance and Economic Affairs suggests efforts will be made in areas of particular importance.

"On one hand, we need to improve the mechanism that can ensure the market's decisive role in resource distribution, break monopoly and give full play to the role of the pricing mechanisms in resource allocation. On the other hand, we should further encourage innovation and improve profitability of market players to explore greater market potential."

For CRI, this is Guan Chao.