Supply Side Structural Reform Has Five Major Tasks.

Diaoyutai State Guest House, building 5, is very busy in Beijing.

"The 50 annual forum of Chinese economy 2016 annual meeting" was held here.

The theme of this annual meeting is "deepening structural reforms on the supply side and improving the quality of development in an all-round way". Zhou Xiaochuan, governor of Central Bank of China, Yang Weimin, Minister of Finance and finance, Minister of finance Lou Jiwei, Dean of Tsinghua School of economics and management, Qian Yingyi, deputy director of central finance office and vice president of central bank, Yi Gang, and renowned economist Wu Jinglian attended and spoke successively, including the international practice and key tasks of supply side structural reform, improving labor market flexibility and total factor productivity, enterprise vitality and entrepreneurship, promoting the total demand management of supply side structural reform, and accelerating the pformation of economic development mode.

"We need to have a clear attitude and strong measures for the central task of defining the structural reform of the supply side. If we miss this time window, the consequences will be very serious."

In his speech, Yang Weimin said that all regions and departments should be issued from the front, and the principles should be subordinated to great principles.

"The whole society has taken action to fight a tough battle for supply side structural reform."

Five major tasks of supply side structural reform

Regarding the task of structural reform on the supply side, Yang Weimin said that in accordance with the speech made by general secretary Xi Jinping at the Twelfth Meeting of the central financial and economic leading group, first, we should have a clear picture of the situation and make clear the problems, and more importantly, we should find out the causes of the problems.

Second, the purpose should be clear and avoid putting the cart before the horse.

If the enterprise is closed, but the excess capacity is not substantially reduced, it will not achieve its goal.

Third, the task should be specific to determine the red line good operation.

For example, lowering the tax burden of enterprises should list the list one by one and complete the deadline.

Fourth, we must deal with the relationship between the government and the market, the government and the enterprises.

"The role of the government and the market is different from that of the central government and the local authorities. The three legal, economic and administrative measures have different effects."

Yang Weimin said, for example, the disposal of zombie enterprises, the central government to do top-level design, give financial subsidies, local governments to stop financial subsidies to zombie enterprises, but should be responsible for the basic life of laid-off workers, central enterprises should be supplemented by administrative measures.

Fifth, the measures should be effective, clear about how to do and what policies and measures should be adopted.

"The general principles should be effective, effective and operational.

Many of the tasks of the supply side reform are individuality, and the sequelae of early digestive stimulus policies.

The uncertainty of the current international economic situation is increasing, so the time window for capacity, inventory and capacity reduction is very short. "The first two or three years of 13th Five-Year are very critical. If there is no obvious progress, coupled with the fluctuation of the international economic situation, we may face more difficulties in the future."

Yang Weimin said.

Supply side and demand side should cooperate with each other.

"Structural reform is also price reform and adjustment.

But in the links of market failure, there are still some structural problems and structural adjustment led by administration.

Zhou Xiaochuan said that because China is moving from a traditional central planned economy to a market economy, the government should play a bigger and better role in the market failure.

Since the global financial crisis, many countries have been relying heavily on monetary policy because of their relatively small fiscal policy space and high debt ratio in the past.

"In fact, we should pay more attention to the supply side policy considerations, and the supply side and demand side are mutually compatible."

"The current structural reform of supply side is inseparable from the management of adequate total demand," Yi Gang said at the meeting.

In the current and future period, the main aspect of the contradiction is structural reform on the supply side.

The management of aggregate demand is in an auxiliary position, and it is a coordination policy.

Although the management of aggregate demand is a policy of total quantity, it should emphasize the pertinence and precision.

Yi Gang believes that fiscal policy is a natural structural policy, so fiscal policy should be the main battlefield of demand management in the supply side reform. "Fiscal policy has many structural considerations, such as poverty alleviation and structural adjustment."

In terms of monetary policy, it should be prudent, "monetary policy should be avoided too lenient.

Otherwise, asset price bubbles and devaluation of the renminbi will probably occur.

Improving labour market flexibility and total factor productivity

Lou Jiwei believes that the constraint of the labor contract law to the enterprise largely reduces the flexibility of the labor market, is not conducive to the improvement of total factor productivity, and ultimately leads to low labor productivity.

Data show that in 1981-2012 years, China, the United States and Japan put forward the contribution rate of total factor productivity to economic growth by 40%, 43% and 35% respectively, and China is higher than Japan.

"Japan's 1995-2000 years, 2001-2005 years, from 2006-2010 years, total factor productivity growth to economic growth is 30%, 66%, 70%, Japan's total factor productivity is rising."

Lou Jiwei said.

Lou Jiwei believed that

The constraints on enterprises, legislations and judicature are reflected, which greatly reduces the flexibility of China's labor market, is not conducive to the improvement of total factor productivity, and ultimately leads to low labor productivity.

"The current employment system is divorced from labor productivity and wages are rising rigidly.

In the past ten years, especially in the last eight years, wages have exceeded two or three percentage points of labour productivity, making our competitiveness less and less competitive.

Actually, the generation system is flexible and can not be developed for a long time.

The distortion caused by law has greatly reduced productivity.

Moreover, the current labor contract law reduces the willingness of enterprises to invest in human capital, and enterprises need to pay a lot of training costs to make non skilled workers become skilled workers.

For the above problems, Lou Jiwei believes that the next step should be to ensure the flexibility of the labor market, and at the same time, we should combine vocational training with enterprises so as to increase labour productivity.

Focus on enterprise vitality

"

Entrepreneurship and entrepreneurship are two sides of a coin. "

At the meeting, Qian stressed that the phenomenon of bureaucracy stifling entrepreneurship is everywhere. Bureaucracy from government departments is still a major obstacle to innovation.

"Advocate entrepreneurship, advocate entrepreneurship, pay attention to the vitality of enterprises, at the same time, we must reduce bureaucracy, that is, decentralization and decentralization."

In Qian Yingyi's view, entrepreneurship is not limited to start-ups and private enterprises, but also to state-owned enterprises.

But because state enterprises are more vulnerable to government constraints, greater efforts are needed to stimulate entrepreneurship and enterprise vitality.

"The tradition of the planned economy makes it easier for us to rely on the government to promote innovation, but the vitality of the enterprise depends mainly on entrepreneurship.

In stimulating the vitality of enterprises, although the government should play a catalytic role, while promoting entrepreneurship, we must decentralization and reduce the constraints imposed by bureaucracy. "

Qian Ying said.

Vigilance against supply side reform

Wu Jinglian is worried about the old side of the supply side reform. The leading departments are busy issuing documents, and the lower level departments are busy studying documents. In this way, the reform of idling has become rhetoric, and we must arouse enough vigilance.

"The third plenary session has done a good top-level design for comprehensively deepening the reform, and many reform projects have been approved by the Central Committee for deep reform.

But there seems to be a problem with the convergence between these top-level designs and specific implementation plans. "

Wu Jinglian said that the top level of the reform must be designed and the guidance is rooted in the ground.

"General Secretary Xi Jinping said at the January 12th meeting of the Central Committee for deep reform," this year, we strive to build up the new framework of the main body, which will help deepen the reform of the objectives and achieve joint goals and make every reform possible.

I suggest that our leading departments and executive departments should cooperate fully to study the progress of each reform and whether there are deficiencies in its design and what supplements should be made in the implementation process.