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By Zhang Junkuo, DRC

2017-1-23

China’s economic performance is becoming more and more stable. First, the decline of growth rate has eased. Second, the market demand is improving, investment growth has increased, and import and export decline has become eased. Third, the business environment and enterprise benefits are both improving. Fourth, the prospective earnings of enterprises have taken a turn for the better.

However, the foundation of economic stabilization is still not sound. It is mainly because that the new growth drivers of economy are not strong enough, and could not play a leading role in economic growth. The self-healing power of the market i

s relatively weak, and the recovery of the real economy, especially manufacturing industry, is not yet in place. The key to addressing these issues lies in the acceleration of reform. Since the 18th CPC National Congress, the Central Government has made great efforts to push forward reform. Since the Third Plenary Session, the reform has been promoted comprehensively, and has achieved remarkable results in many areas. Historical experience and the present economic performance have proved that the potential for mid-to-high growth will not automatically phase in. For future reform, it is necessary to properly address the following four issues. First, in regard to reform measures, it is necessary to handle well the relations between the supply-side reform and demand-side reform. Second, with regard to supply-side structural reform, the government needs to treat properly the relations between the new industries and traditional industries. Third, with respect to the reform approach, it is important to deal in a proper manner with the relations between top-level design and pilot practice at grassroots levels. And fourth, in view of the design of driving mechanism for reform, the relations between incentive and constraint mechanisms need to be properly managed.

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