Government Urged to Push Forward with Supply Side Structural Reforms
President Xi Jinping have urged the government to resolutely push forward supply side structural reform since the second largest economy in the world is still facing a strong headwind that is reflected by the easing of economic indicators in April. The reform is on of the major ley in the overall and long term well being of the Chinese economy as it faces cyclical problems and challenges of scale. But in the structural and supply side problem are the most serious.
According to Xi, the main direction of reform is to reduce the ineffective supply while at the same time increase effective supply and make the supply structure to fit the demand structure. The core of reform is to push the reform of State owned enterprises, deepen fundamental reforms and speed up the transformation of government functions. Both the market and government must play a better role in balancing the reforms.
A few weeks ago President Xi delivered a speech to the principal ministerial and provincial officials stating that the country’s economic future is hinging on the supply side structural reforms. His reiteration of the structural side reforms is reflected in a policymaker’s judgment of the current situation. As the supply side structural reform will be the key in solving the problems that the economy faces.