Con­fer­ence maps out plans to bol­ster real econ­omy transition

China Daily (Hong Kong) - - TOP NEWS - By ZHENG XIN zhengxin@chi­nadaily.com.cn

That China will main­tain mixed own­er­ship re­form as a key facet of State-owned en­ter­prise re­forms was the con­sen­sus at a top level eco­nomic work con­fer­ence on Fri­day.

Mixed own­er­ship will gen­er­ate sub­stan­tive progress in sec­tors such as power, petroleum, nat­u­ral gas, rail­way, civil avi­a­tion, telecom­mu­ni­ca­tion and mil­i­tary, ac­cord­ing to a state­ment is­sued at the close of the Cen­tral Eco­nomic Work Con­fer­ence.

Mixed own­er­ship should be car­ried out with good gover­nance, strength­en­ing in­cen­tive as well as en­hanc­ing ef­fi­ciency, the state­ment said.

The con­fer­ence, which ended on Fri­day and was held by the coun­try’s top lead­ers to map out eco­nomic and re­form plans, is closely watched by in­vestors for clues on pol­icy pri­or­i­ties and eco­nomic tar­gets for the year ahead.

China will also fo­cus on im­prov­ing prod­uct qual­ity and core com­pet­i­tive­ness to bol­ster the real econ­omy next year, the state­ment said.

The coun­try will con­tinue to push for­ward its in­no­va­tion-driven devel­op­ment strat­egy and im­prove its busi­ness en­vi­ron­ment to al­low over­seas in­vest­ment to play a big­ger role in strength­en­ing the real econ­omy, it said.

The na­tional econ­omy has re­cov­ered from the soft patches this year, and in­vest­ment has picked up in many key sec­tors since Septem­ber.

China’s in­dus­trial out­put ex­panded by 6.2 per­cent year-on-year in Novem­ber, thanks to the elec­tronic equip­ment and au­to­mo­bile sec­tors, ac­cord­ing to the Na­tional Bureau of Statis­tics.

En­ergy con­sump­tion, a barome- ter for eco­nomic ac­tiv­ity, grew by 5 per­cent year-on-year from Jan­uary to Novem­ber, com­pared with 4.8 per­cent in the first 10 months, ac­cord­ing to the Na­tional En­ergy Ad­min­is­tra­tion.

Economists sug­gest re­duc­ing tax and bar­ri­ers for en­trepreneurs to fur­ther stim­u­late the real econ­omy and pre­vent ex­ces­sive funds from flow­ing into fields out­side the real econ­omy.

“China needs to ac­cel­er­ate its fi­nan­cial re­forms and in­no­vate to ex­tend sub­stan­tial fi­nan­cial sup­port in the real econ­omy,” said Zong Liang, deputy di­rec­tor of the In­sti­tute of In­terna- tional Finance at the Bank of China.

“Many of the coun­try’s real econ­omy sec­tors are not mak­ing prof­its, and cor­po­ra­tions and en­ter­prises face a higher tax­a­tion than they should,” he said.

Ac­cord­ing to Huang Zhi­long, macro-econ­omy re­search chief at the Sun­ing In­sti­tute of Finance in Nan­jing, ac­tive pri­vate in­vest­ment comes only when the coun­try’s real econ­omy is boom­ing. Cur­rent pri­vate in­vest­ment into the real econ­omy is chal­lenged by a se­ries of hur­dles such as high bar­ri­ers to en­try, fi­nanc­ing dif­fi­cul­ties and heavy tax bur­dens, he said.

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