NDRC: Over­ca­pac­ity top re­form pri­or­ity for 2017

Eco­nomic plan­ner says mul­ti­ple poli­cies will en­sure ‘sub­stan­tial head­way’ is made

China Daily (Hong Kong) - - TOP NEWS - By WANG YANFEI and YANG ZIMAN

China’s top eco­nomic plan­ner said on Satur­day that cutting ex­cess pro­duc­tion ca­pac­ity will be a pri­or­ity for its work next year.

The Na­tional De­vel­op­ment and Re­form Com­mis­sion will con­tinue to push sup­ply-side re­form, in­clud­ing cutting over­ca­pac­ity, de­stock­ing, delever­ag­ing, re­duc­ing cor­po­rate costs and shoring up weak links in the econ­omy, ac­cord­ing to a state­ment af­ter its an­nual work con­fer­ence.

“Sub­stan­tial head­way must be made in car­ry­ing out these tasks,” the state­ment said, adding that break­throughs should be made in cru­cial fields, while mul­ti­ple poli­cies will be im­ple­mented to boost de­mand and en­sure healthy eco­nomic de­vel­op­ment.

The com­mis­sion will use mar­ket and le­gal tools to balance over­ca­pac­ity re­duc­tion with sta­ble sup­ply, and struc­tural op­ti­miza­tion with in­dus­trial up­grades, Xu Shao- shi, head of the com­mis­sion, was quoted as say­ing.

The NDRC said it will also con­trol the lever­age ra­tio of the non­fi­nan­cial cor­po­rate sec­tor, and fur­ther cut tax­a­tion and fees for cor­po­ra­tions.

More cen­tral gov­ern­ment funds will be in­vested in poverty re­duc­tion, agri­cul­ture, post-dis­as­ter wa­ter con­ser­vancy, in­fra­struc­ture and in­no­va­tion, Xu said.

Top lead­ers and pol­i­cy­mak­ers have reached a con­sen­sus on sup­ply-side re­form af­ter calls to press ahead with re­struc­tur­ing at the three-day Cen­tral Eco­nomic Work Con­fer­ence, which ended Fri­day.

Yang Weimin, vice-min­is­ter of the Of­fice of the Cen­tral Lead­ing Group on Fi­nance and Eco­nomic Af­fairs, said China will pro­mote de­vel­op­ment of the real econ­omy, en­sure de­vel­op­ment of the real es­tate mar­ket and push agri­cul­tural sup­ply-side re­form aimed at pro­vid­ing green and safe prod­ucts.

“They are the top pri­or­i­ties next year,” he said on Satur­day at a fo­rum held by the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes that was at­tended by se­nior gov­ern­ment of­fi­cials and re­searchers and fo­cused on dis­cus­sions at the Cen­tral Eco­nomic Work Con­fer­ence.

Yang said China will ex­pand the scope of over­ca­pac­ity re­duc­tion from not only steel and coal min­ing, but also to other sec­tors, adding that a mar­ket-ori­ented ap­proach must be adopted.

He said fo­cus will be placed on re­duc­ing real es­tate stock in third- and fourth-tier cities next year, with ef­forts to build more low-price, sub­si­dized hous­ing and boost the rental mar­ket. This comes af­ter pol­i­cy­mak­ers at the work con­fer­ence said that “homes are built to be lived in, not for spec­u­la­tion”.

Yang urged en­ter­prises to lower their high lever­age lev­els, which have re­sulted from bor­row­ing from banks and other fi­nan­cial chan­nels to sus­tain and ex­pand their busi­nesses.

“It is a top pri­or­ity,” he said, and ef­forts “must be car­ried out unswerv­ingly” as in­ter­est rates on that debt con­sti­tute a heavy fi­nan­cial bur­den for en­ter­prises, possibly lead­ing to an in­dus­trial hol­low­ing-out that could un­der­mine the real econ­omy.

Xin Zhim­ing con­trib­uted to this story.

Con­tact the writ­ers at wangyan­fei @chi­nadaily.com.cn

WU JUN / FOR CHINA DAILY

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