Reforms needed to tide over economic challenges

Editor's Note: In the first half of the year, China's GDP grew by 5.3 percent year-on-year. What is the current macroeconomic situation, how will policies proceed in the second half of the year, what challenges do the current deep-seated reforms face and which reforms should be prioritized during the 15th Five-Year Plan period (2026-30)? Yin Yanlin, a member of the 14th National Committee of the Chinese People's Political Consultative Conference, spoke to Jiemian News on these issues. Below are excerpts from the interview. The views don't necessarily represent those of China Daily.

The external environment has become increasingly complex and severe today. China's economy faces multiple difficulties and challenges, and there is considerable downward pressure. To achieve the annual economic and social development goals, macroeconomic policies must be strengthened in the second half of the year. Incremental reserve policies should be promptly introduced to counter the uncertainties of the international economic cycle.

The government should implement more proactive fiscal policies and moderately easy monetary policies. It should accelerate the issuance of government bonds, but keep ample liquidity and take steps to lower the comprehensive social financing costs. More proactive fiscal policies could be introduced at an appropriate time by launching a new round of "large-scale" investment plans.

Apart from these steps, the authorities should also stimulate the consumption potential by implementing policies for upgrading equipment and encourage trade-in consumption programs by removing restrictive measures to accelerate new growth points.

It is necessary to provide interest subsidies to personal consumption loans and to business loans for the service industry, strengthen inter-departmental coordination, simplify procedures and ensure the swift implementation of these policies.

It is important to intensify efforts to expand effective investment, implement major national strategies and build up security capacities in key areas with high quality. The restrictions on investment in key projects should be further relaxed.

Consumption can be boosted by stabilizing the real estate market. Greater emphasis should be placed on halting the decline and on promoting the renovation of urban villages and dilapidated housing. In addition, it is necessary to address the risks in key areas, promoting the deep integration of technological and industrial innovation, deepening reform and opening-up, and ensuring people's livelihoods.

Several economic reforms are required during the 15th Five-Year Plan period (2026-30). First, reforms of State-owned enterprises will help deepen their innovation efforts, optimize the State-owned economy and make resource allocation more efficient. As for the private sector, it is necessary to better protect property rights, more effectively implement the Private Economy Promotion Law and more strongly safeguard the enthusiasm of private players to develop and stabilize the market expectations.

Second, it is essential to break down local protectionism and market fragmentation, standardize local investment promotion practices, and improve the fiscal, taxation and statistical accounting systems to make them conducive to a unified market.

Third, the issues of excessive government intervention and inadequate regulation also need to be addressed. The authorities should further streamline administration to delegate power, deepen reforms of the administrative approval system and minimize government interference in micro-level affairs.

Fourth, in response to global changes and competition, some domestic rules should be adjusted in accordance with the requirements of high-standard economic and trade agreements. By ensuring institutional opening-up, China can enhance the resilience of its industry and supply chains, and advance further in global competition.