Transformation through structural reform
- By Chi Fulin
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E-mail Beijing Review, March 15, 2016
Facing these problems, the government should be more committed to advancing structural reform and exploring new paths to clear its obstacles.
To begin with, the reform should be adopted in order to advance industrial restructuring. After China entered the middle and late stages of industrialization, the emphasis in market resource allocation was transferred from the industrial sector to the service sector. The market should therefore be relied on to develop mainly modern producer services and advance the transformation of the manufacturing industry.
Next, all economic restructuring should be oriented with the revamping of urbanization policies. China will enter a new stage in its plans to urbanize its population during the 13th Five-Year Plan period. The government must consequently seed the household registration system with new ideas, aiming to accelerate the process and unleash the biggest dividends in the future.
Furthermore, structural reform should push forward consumption restructuring. The key to realize the major breakthroughs needed for a consumption-driven growth pattern is to innovate in terms of supply, satisfy the increasingly diversified and individualized demands of consumers, and accelerate the transformation of investments.
The Third Plenary Session of the 18th CPC Central Committee held in November 2013 put forth a master plan for bolstering economic reform. The achievements in the last two years have showed that reform in some fields has been progressing at a rapid pace, grasping real breakthroughs. But in other sectors, the reform has been carried out slowly.
Ever since the reform has reached deeper into the core of the economy, fundamental changes have taken place in the conditions necessary for restructuring, making reform efforts more difficult and complicated. This therefore requires that the government establish new ideas in developing the economy in an innovative, coordinated, green, open and inclusive way. Furthermore, the government should break down the confinement of interest groups and build a better environment for reforms, so as to provide impetus for the economic transformation.
This is an edited excerpt of an article written by Chi Fulin, Director of the China (Hainan) Institute for Reform and Development, and published in Economic Information Daily
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