Liu Shijin: What Does The Supply Side Reform Mean?

Relative to the demand side reform measures, the supply side reform focuses more on enhancing the efficiency of economic growth, more focused on enhancing the vitality of long-term development of enterprises, and paying more attention to long-term, sustained and balanced economic development.

During the "13th Five-Year" period, the focus of economic development was not to expand the total economy, but to improve the quality and efficiency of economic growth.

The structural reform of supply side is to enhance the productivity of all factors in China.

As a main line, this is the core issue of the long-term and steady development of China's economy.

At this stage, the policy focus should be on increasing the supply side adjustment, guiding the excess capacity supply side reduction and structural adjustment, reaching a new level suited to the demand side, stabilizing prices, and restoring the profitability of enterprises so as to achieve restructuring and rebalancing.

At present, in the supply side structural reform, the level of corporate profitability is a core indicator that needs special attention.

China's economic growth rate is higher and lower. This is not the biggest problem. The key is to maintain the growth of corporate profits.

At present, the profit of enterprises is negative growth. In the future, after the profits of enterprises, employment will increase, financial revenue will increase, and the risk of enterprises will be controlled.

As I said, enterprises can be profitable, financial revenue can be increased, employment can be enough, risk can be controlled, people's livelihood can be improved, resources and environment can be sustainable "six targets", and the core is enterprise profitability.

This should be a core indicator of economic pformation and an important indicator of the success of the reform.

The structural reform of the supply side has been talked about a lot from the the third Plenary Session of the 18th CPC Central Committee to the fifth Plenary Session of the 18th CPC Central Committee of the party, and the macro deployment has also been made. The key is to turn the document into practice and put it into practice.

The structural reform of supply side should be linked up and down, not only with top-level design but also with grass-roots vision.

First of all, the top-level design is mainly to manage the macro direction and draw the bottom line.

In addition, in the supply side structural reform, which measures are more effective, or let the local and grass-roots enterprises have more space to test, we can find effective measures through experiments.

This is also the most important experience of China's reform over the past 30 years.

This experience is still applicable now.

Shi said that the structural reform of the supply side needs to focus on the following issues:

First, we should intensify our efforts in reducing production capacity and make substantial progress.

Second, we should further relax access and speed up the reform of administrative monopoly industries.

Third, we should speed up the flow of land, capital and personnel among urban and rural areas so as to achieve rational allocation.

Fourth, speed up nurturing innovation.

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Fifth, we should further accelerate the pformation and upgrading of industries.

Where does the structural reform of supply side take place?

The structural reform of supply side needs to focus on the following issues:

First, we should intensify our efforts in reducing production capacity and make substantial progress.

At present, the whole Chinese economy is generally concerned about the slowdown of GDP growth. In fact, the most challenging thing is the decline in the profitability of industrial enterprises.

The negative growth of industrial enterprises' earnings has lasted for more than a year. The main reason is overcapacity, especially heavy industry sectors such as iron and steel, iron ore, coal, petroleum, petrochemical and so on.

PPI has been negative growth for more than 40 consecutive months, and these industries contribute 70% to 80% of the total decline in industrial PPI.

If this situation continues, not only will enterprises increase their operational difficulties, but also the risks of Finance and finance will be further enlarged or highlighted.

The key to breaking this situation is to carry out substantive operations on the serious excess industries in terms of reducing production capacity.

But because these heavy chemical industries are mainly state-owned enterprises, in addition to the contradiction between the reduction of output and steady growth, there are still problems of people and debts that need to be solved.

If it is difficult to solve problems by relying solely on localities, enterprises and markets, it is still necessary to take some measures from the national level.

To promote the reduction of production capacity of enterprises, we must further promote the merger and reorganization of marketization, play a leading role through dominant enterprises, and reintegrate productivity with market oriented methods, so as to enhance the efficiency of the whole enterprise.

Second, we should further relax access and speed up the reform of administrative monopoly industries.

Some time ago, the relaxation of access was mainly aimed at small and micro enterprises, and some measures were taken in the reform of the commercial system and the degree of facilitation, and also played a positive role.

But in terms of steady growth and efficiency, it is not only to "let go small", but also to "enlarge" in a more practical sense. That is, in the basic industries with prominent administrative monopoly, we should effectively relax the entry and introduce competition.

After relaxing their access, these industries can effectively improve supply and reduce costs, and at the same time enhance efficiency through competition.

Third, speed up the land between urban and rural areas.

The flow of personnel and other factors can be rationalized.

Now China's cities are developing steadily, the development space in the rural areas is relatively simple, and the new growth point in the future is between urban and rural areas.

Concretely speaking, urbanization is now being promoted, and some small and medium-sized cities and towns are developed through interconnection and interconnection between existing cities, forming a certain range of urban belt and city circle, and from the past isolated cities to network cities, the potential in this area is still great.

Fourth, accelerate the development of an environment conducive to innovation.

In the past, people always like to do industrial development planning, but innovation is difficult to plan in essence. The most important thing is to have an environment conducive to innovation, including the role of the intellectual property system, to make the managers of the state-owned enterprises, the managers of the private enterprises to form a stable expectation, to promote the rational flow of the elements, to accelerate the cultivation of human capital and to promote the reform of the financial system, so as to adapt to the reform of the financial system.

Needs.

Fifth, we should further accelerate the pformation and upgrading of industries.

There are basically two directions in China's economic pformation and upgrading, one is innovation, and the other is "refined production" in two.

"Refined production" means doing fine work, that is, to maximize the "craftsman spirit".

Most of our manufacturing stalls have been rolled out, but on the whole, the degree of refinement is relatively low.

China has great potential in this respect.

Is the supply side reform an alternative to the "three carriages"?

This is not true. The supply and demand of economics are simultaneous. Turning to the supply side means more emphasis should be placed on stimulating demand rather than stimulating demand.

The supply side emphasizes that the efficiency can be improved by reconfiguring the allocation of resources, but it does not mean that demand is not important.

Some people say that the theory of "three carriages" is incorrect, and this is not the expression of economics.

Supply and demand is a balanced relationship between two sides. The reform of supply side is also creating demand at the end, which is solving the problem of demand.

For example, the reduction of production capacity and merger and reorganization are actually adjusting the supply structure, reducing the supply that is not needed, and creating market demand.

The same is true for the reform of the administrative monopoly industries.

The growth of manufacturing industry, pformation and upgrading, and the development of service industry create new demands through the reform of supply side.

In general, solving the supply problem also creates new demands, and this new demand is more reliable, more realistic and more sustainable.