By Liu Shijin, DRC
The year 2017 will be crucial to China’s economic transformation. As long as the macroeconomic policies are adequately implemented, substantial progress can be achieved in the supply-side structural reform, and a new growth platform will be built after economic growth smoothly bottoms out. The present supply-side structural reform is centered on the reform of the factor market. Efforts should focus on the mobility, restructuring and optimal allocation of the factors of production, in order to stimulate the industrial upgrade, build up an innovative environment and provide necessary systemic and policy conditions for the improvement of China’s economic quality in the new era.
First, China’s economy is still experiencing a “catch-up” development, with major efforts focused on drawing on and making use of other countries’ achievements. The government needs to facilitate overseas companies’ entry to China and Chinese companies’ expansion abroad, that are conducive to quality improvement.
Second, the government needs to advocate the mixed ownership, making arrangements based on the principle of enhancing the efficiency and in compliance with the requirement for enterprises’ governance structure. In this connection, people’s understanding and awareness on relevant problems including some legal issues are to be addressed so as to provide some successful cases for reference.
Third, the government needs to promote the stable and sound development of the real estate market. 1. The collection of real estate tax should be based on practical conditions with feasible measures. It is not only part of the basic system of an advanced economy, but also a major issue of China’s reform on fiscal system. 2. It is essential to accelerate the implementation of the reform of rural collective land ownership system.
Fourth, the government needs to strive to vitalize the real economy. As the manufacturing industry remains the core of national competitiveness, the manufacturing- and the real economy-based notion and policy are essential and fundamental to China’s development, which must be firmly established and implemented. Economic bubbles of all types should be resisted and resources should be channeled into activities that could boost productivity.
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