By Wang Yiming, DRC

2016-12-26

The Central Economic Work Conference further emphasized that we need to adhere to the general principle of seeking progress while keeping performance stable and pointed out that it is an important principle for the governance of China. The conference highlighted the major issues and tasks to be addressed and fulfilled in relevant fields, which shows that the CPC Central Committee led by Xi Jinping has taken an innovative approach toward developing China’s economy under complicated situation.

First, the stable economic performance should focus on stable policy, stable environment, stable market expectations and ensure that financial risks will not go beyond the bottom line. 1. We need to maintain the stability and sustainability of macroeconomic policy and keep implementing proactive fiscal policy and prudent monetary policy. 2. We need to keep a stable environment for economic operation, attach more importance to the prevention and control of financial risks, prevent and control asset bubbles, strengthen and improve supervision ability and keep exchange rate basically stable. 3. We need to effectively stabilize market expectations and increase the transparency of policy measures, stick to the basic economic system, adhere to the principle of opening wider to the outside world, enhance property rights protection and safeguard legal environment. 4. We need to maintain harmony and stability of the society, spare no efforts to provide employment support, effectively handle social security issues and enhance support for special needs groups with particular difficulties.

Second, we need to make substantial progress in key areas. 1. We need to further strive to cut overcapacity and excess inventory, deleverage, reduce costs and strengthen points of weakness and work hard to make substantial progress. We need to establish a mechanism for overcapacity to withdraw from the market, focus on dealing with real estate inventory in third- and fourth-tier cities, reduce leverage rate and institutional transaction costs of enterprises and attach importance to improving business environment and shoring up institutional weakness. 2. We need to deepen the supply-side structural reform of agriculture. 3. We need to energetically revitalize the real economy. 4. We need to bring into play the leading role of reform. 5. We need to create a new environment for innovation-driven development.

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