NPC and CPPCC: Senior economist Li Yining on Chinese economy in 2016

CCTV News

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Supply side-reform is dominating the Two Sessions of the NPC and the CPPCC. Five national political advisors have briefed the media on this subject of how China will push forward reforms in various sectors across the country. CCTV’s Xing Zheming reports from Beijing.

NPC and CPPCC: Senior economist Li Yining on Chinese economy in 2016

NPC and CPPCC: Senior economist Li Yining on Chinese economy in 2016

Supply side-reform is dominating the Two Sessions of the NPC and the CPPCC. Five national political advisors have briefed the media on this subject of how China will push forward reforms in various sectors across the country. CCTV's Xing Zheming reports from Beijing.

China now faces a number of difficulties amid a sluggish global economy. They include industrial overcapacity, rising home prices and a shortage of high-end products. The government is now heavily promoting supply-side reform as a way to solve these issues.

During the two sessions, key policy makers are telling the public how these initiatives might work.

Senior economist and CPPCC member Li Yining has been a leading voice on China’s economic structural reform. He’s called for the privatization of state-owned companies, and his advocacy led to the establishment of China’s stock market in 1990.

The 85-year-old economist said fine-tuning can help China’s economy move forward.

“China’s economy will remain stable and see progress in 2016. This is the general trend. We will still implement a proactive fiscal policy and a prudent monetary policy. The key is to remain cautious. Instead, the economy needs directional adjustment and control, fine adjustment, and pre-adjustment. Investment and consumption in the economy will not be sharply reduced. In fact, there are many projects in need of investment in China,” Li said.

Li said there are key challenges to implementing supply-side reform, especially structural reform.

China’s economy is being slowed down by badly-performing enterprises, but shutting down these companies would mean laying off workers.

Li said the central government could support the laid-off workers financially, and train them to find better jobs instead of subsidizing companies which lose money. That’s one solution for people in the cities. What about China’s vast population living in rural areas, who also hope to benefit from China’s economy.

Supply-side reform is also on the cards for rural areas.

“There should be reform and innovation in the current system and mechanisms. As we all know, we are actively pushing ahead in the pricing, subsidizing and storage mechanisms of key grain products,” CPPCC member Chen Xiwen said.

That means the central government will let the market set the prices of major agricultural products. Chen said the pricing mechanism for corn will soon begin, and the government will provide different forms of subsidies to farmers.