China'S Economy: Achieving Stability In Structural Reform

2016 is the beginning of the decisive stage of building a well-off society in an all-round way. It is also the year of tackling structural reform.

What is the development trend of China's economy entering the new normal? What challenges and tasks are facing? What kind of development picture will it show?

Good structural reform

Since January 1, 2016, China has reduced the average electricity price of coal-fired power generation by about 3 cents per kilowatt hour. It has been "effective" to reduce production costs and reduce the burden of enterprises and promote structural optimization.

The price reduction will focus on reducing the price of general industrial and commercial sales, supporting the pformation of ultra low emission of coal-fired power plants and the development of renewable energy, and establishing special funds for structural adjustment of industrial enterprises.

State Information Center

Niu Li, director of the research office, said that this reflects the overall thinking of promoting structural reform in the country.

"In particular, the state will adopt a safe way of dealing with the problem of laid-off unemployment, which may be caused by excess capacity."

Wang Jun predicted that in 2016, the overcapacity and deleveraging pressure of enterprises will be greater. The pressure of real estate inventory will not decrease, and investment growth rate may continue to fall. Consumption will continue to play a stabilizer role in economic growth, but the factors that affect consumption upgrading still exist.

Wang Yiming, deputy director of the State Council Development Research Center, said that an important part of structural adjustment is effective clearing of excess capacity.

We must resolutely push forward the adjustment of the supply side structure, pay more attention to the use of market mechanisms, economic means and the rule of law to resolve overcapacity, improve the exit mechanism and make substantive progress in structural adjustment.

Ensure that the economy is running at a reasonable interval.

"The situation facing China's development in 2016 may be more severe and complicated, and the difficulties may be bigger than this year."

Xu Shaoshi, director of the national development and Reform Commission, said at the National Conference on development and reform held recently that we should enhance our sense of crisis, stabilize our expectations, enhance our confidence and strengthen our efforts.

Convergence and coordination will form a superposition and magnification effect of increasing effective demand to ensure that the economic operation is in a reasonable range.

He said that China's economy is still facing many difficulties and challenges in 2016.

On the one hand, the unstable and uncertain factors of the external environment will affect China's economic development through such channels as exchange rate, investment and trade.

On the other hand, the downward pressure on the domestic economy is still relatively large, and the profitability of the enterprises is decreasing. The market is expected to be unstable and lack of confidence. The willingness of large enterprises to invest is not strong, and the problems of financing difficulties and financing difficulties of SMEs are prominent.

"The first challenge for China's economy in 2016 is how to stabilize the trend of economic operation, so that steady growth can really see the real results and achieve a good start in 13th Five-Year."

Wang Jun, deputy director of the Information Department of China International Economic Exchange Center, said that from the short-term factors of demand side, the economic growth rate in 2016 was more stable than 6.5%.

Despite the enormous challenges, some good momentum has begun to emerge.

According to the latest data from the National Bureau of statistics, the growth rate of fixed asset investment in China from 1 to November in 2015 was unchanged from the previous 10 months, which changed the trend of slowing down since the second half of 2014.

In November, the price of housing and the year-on-year rise were increased, and the increase continued to expand. The sales area and sales growth rate of commercial housing was higher than that of October. The total retail sales of social consumer goods continued to rise steadily.

Sheng Lai Yun, a spokesman for the National Bureau of statistics, predicts that the positive factors in economic growth will be further accumulated as the effectiveness of policies continues to play.

"Infrastructure investment is constantly improving, and the real estate market is expected to remain warmer. Consumption and investment will be stable and favorable. The probability of foreign trade going to an uncertain low position will be greater. It is expected that economic growth will be stable in 2016, and the economy will be better in the second half of the year."

State Council Development Research Center researcher Zhang Liqun said.

Old capacity adjustment and upgrading, new capacity growth.

In the first three quarters of 2015, the output value of the ten strategic emerging industries in Chongqing increased by 29%, which will exceed 200 billion yuan in the whole year.

In 13th Five-Year, the annual output value is expected to reach 1 trillion yuan.

Industrial development is inseparable from financial support.

In May 2015, Chongqing initiated the establishment of a new strategic equity investment fund with an initial scale of about 25 billion 500 million yuan. By introducing social security funds, banks, trusts, insurance and other social capital of about 55 billion yuan, the parent fund group of 80 billion yuan was formed to leverage more social capital to support the development of strategic emerging industries.

The central economic work conference pointed out that to promote structural reform, we must rely on comprehensive deepening reform, and explicitly introduce a number of reform measures with significant traction in the fields of state-owned enterprises, finance, taxation, finance, banking, endowment insurance, and medical and health systems.

"Whether it is structural adjustment of supply side, pformation and upgrading of enterprises, or moderate expansion of aggregate demand, stable economic growth, and then nurturing new development kinetic energy and enhancing the new driving force for sustained economic growth, reform will continue throughout the process and play a role of traction and guidance."

Zhang Liqun said.

Goldman Sachs economist Song Yu predicted that in 2016, the pace of China's reform will accelerate and the structural reform will be further strengthened.

"Those factors that will cause difficulties in reform will not disappear overnight.

China's reform has entered the deep water area, and the reform in many fields should be promoted simultaneously, which puts forward higher requirements for the macro control capability and art.