Page 22 - 2017 White Paper
P. 22
7 White Paper on the Business Environment in China
1.2 Supply-Side Economic Reform and
The 13th Five-Year Plan (2016-2020)
Progress Report of Beijing’s intention for stronger, interventionist, top-
down control over the entire economy (Roberts 2016).
So, in the year or so that has passed since the
13th Five-Year Plan was approved by the Fifth Aligning with the president’s remarks and citing that
Plenum in the fall of 2015, what progress has been made, “hard times motivate people to change their ways for the
if any, on China’s structural supply-side reforms? Even better”, Song Zhe, a commissioner for China’s Ministry
though the words “supply-side reform” seemed to be the of Foreign Affairs in Hong Kong, argued in an opinion
Chinese government’s, and consequently, the Chinese piece in the China Daily that although China’s economy
media’s new catchphrase of 2016, depending on whose was running steadily if slowly, worrisome indicators such
opinion is being sought, the answers seemed to vary as sluggish manufacturing and overcapacity in certain
greatly. sectors meant that supply-side reforms urgently needed
to be stepped up (Song 2016).
Reuters begged the question, what does supply-side
reform really mean in China? Analysts say that in China, it Structural supply-side reforms in China were “right on
refers to reducing the role of government in business to target”, Xinhua crowed in May 2016, quoting Zhao Yao,
allow market forces to dictate the direction of economic professor and co-director of the Supply Chain Analytics
policies, such as through the restructuring of state- Laboratory at the Business School of Rutgers University,
owned companies. But, again in China, its exact meaning who said that the Chinese economy has steadied into a
has been left vague, perhaps on purpose, Reuters has “new normal” of lower growth rates. As China’s economy
concluded (Wong et al. 2016). enters a “new normal”, he said, industries need to
shift gears, from growing via scale and speed toward
The phrase was introduced on a global platform at growth emphasizing quality and efficiency. Mr. Zhao
the G20 summit in Hangzhou, Bloomberg reported, said: “Supply-side reform is mainly two things, one is
when President Xi Jinping, during an opening address to improve the Chinese companies’ productivity and
attended by President Obama, Russian President Vladimir the other is to win the competition in a global market.”
Putin, and Indian Prime Minister Narendra Modi, declared (Xinhua 2016a)
that reform in China “has entered the deep-water zone
where tough challenges must be met”. Urging “real On May 12, according to the South China Morning
action” and promising “no empty talk”, President Xi said Post, the National Development and Reform Commission
China would continue “vigorously advancing supply-side (NDRC) said all local governments had completed
structural reform”. Throughout the year, the phrase had their action plans to cut excess capacity, and initiatives
been regularly hailed in the Chinese state media as “the to resolve overcapacity had “entered full-fledged
newest guiding principle for China’s economic future”, implementation stage”. However, on May 16, the Post
Bloomberg observed. “Supply-side structural reform is notes, President Xi said he was not completely happy
an urgent task that cannot afford any delay”, Bloomberg with the reform process during a meeting with senior
quotes the People’s Daily in January 2016 in its front- party members. “Some local governments haven’t
page commentary. A second-page commentary warned started vigorous implementation yet, and some efforts
in May 2016 of excessive debt and called for “more are missing the point”, The Post says he said, according to
supply-side reform”. Analysts say, however, Bloomberg China Central Television reports (Xie 2016).
notes, that in China, supply-side reform is an indication
22
1.2 Supply-Side Economic Reform and
The 13th Five-Year Plan (2016-2020)
Progress Report of Beijing’s intention for stronger, interventionist, top-
down control over the entire economy (Roberts 2016).
So, in the year or so that has passed since the
13th Five-Year Plan was approved by the Fifth Aligning with the president’s remarks and citing that
Plenum in the fall of 2015, what progress has been made, “hard times motivate people to change their ways for the
if any, on China’s structural supply-side reforms? Even better”, Song Zhe, a commissioner for China’s Ministry
though the words “supply-side reform” seemed to be the of Foreign Affairs in Hong Kong, argued in an opinion
Chinese government’s, and consequently, the Chinese piece in the China Daily that although China’s economy
media’s new catchphrase of 2016, depending on whose was running steadily if slowly, worrisome indicators such
opinion is being sought, the answers seemed to vary as sluggish manufacturing and overcapacity in certain
greatly. sectors meant that supply-side reforms urgently needed
to be stepped up (Song 2016).
Reuters begged the question, what does supply-side
reform really mean in China? Analysts say that in China, it Structural supply-side reforms in China were “right on
refers to reducing the role of government in business to target”, Xinhua crowed in May 2016, quoting Zhao Yao,
allow market forces to dictate the direction of economic professor and co-director of the Supply Chain Analytics
policies, such as through the restructuring of state- Laboratory at the Business School of Rutgers University,
owned companies. But, again in China, its exact meaning who said that the Chinese economy has steadied into a
has been left vague, perhaps on purpose, Reuters has “new normal” of lower growth rates. As China’s economy
concluded (Wong et al. 2016). enters a “new normal”, he said, industries need to
shift gears, from growing via scale and speed toward
The phrase was introduced on a global platform at growth emphasizing quality and efficiency. Mr. Zhao
the G20 summit in Hangzhou, Bloomberg reported, said: “Supply-side reform is mainly two things, one is
when President Xi Jinping, during an opening address to improve the Chinese companies’ productivity and
attended by President Obama, Russian President Vladimir the other is to win the competition in a global market.”
Putin, and Indian Prime Minister Narendra Modi, declared (Xinhua 2016a)
that reform in China “has entered the deep-water zone
where tough challenges must be met”. Urging “real On May 12, according to the South China Morning
action” and promising “no empty talk”, President Xi said Post, the National Development and Reform Commission
China would continue “vigorously advancing supply-side (NDRC) said all local governments had completed
structural reform”. Throughout the year, the phrase had their action plans to cut excess capacity, and initiatives
been regularly hailed in the Chinese state media as “the to resolve overcapacity had “entered full-fledged
newest guiding principle for China’s economic future”, implementation stage”. However, on May 16, the Post
Bloomberg observed. “Supply-side structural reform is notes, President Xi said he was not completely happy
an urgent task that cannot afford any delay”, Bloomberg with the reform process during a meeting with senior
quotes the People’s Daily in January 2016 in its front- party members. “Some local governments haven’t
page commentary. A second-page commentary warned started vigorous implementation yet, and some efforts
in May 2016 of excessive debt and called for “more are missing the point”, The Post says he said, according to
supply-side reform”. Analysts say, however, Bloomberg China Central Television reports (Xie 2016).
notes, that in China, supply-side reform is an indication
22
