Speech by Li Wei, President of DRC, at the 14th China Enterprise Development Forum

On July 30, Li Wei, President of the Development Research Center of the State Council, attended the opening ceremony of the 14th China Enterprise Development Forum (2016) co-sponsored by China Enterprise Evaluation Association (CEEA) and China Mobile Communications Corporation (CMCC), and made a speech on ways for enterprises to properly get involved in the supply-side structural reform.

Li Wei pointed out that instead of the steady development performance, China's economy is facing increased downward pressure. The economic development has entered a turning point with prominent structural problems. China has to deal simultaneously with slower economic growth, difficult structural adjustments and the impacts of previous economic stimulus measures. The central government has, from a long-term perspective, vigorously promoted the supply-side structural reform and adjustment to improve the quality and efficiency of economic development. The central government and some provinces have taken a series of measures and made proper arrangements to cut overcapacity and excess inventory, deleverage, reduce costs and strengthen points of weakness. Some measures have been carried out and achieved initial results, but it is still necessary to accelerate the implementation of some substantial reform measures.

Li Wei stressed that the policy measures of supply-side structural reform must be implemented in the enterprises and the effectiveness of the reform will eventually be reflected in the promotion of product quality and operational efficiency. The proper implementation of the reform measures has a profound impact on reducing business cost, improving market environment, enhancing market vitality and allowing the market to determine which businesses could survive through competition. For instance, the reform of lowering the cost is related to at least five aspects such as decentralization, tax reduction, social security fee reduction, energy and transportation price reform and financial reform.

Li Wei believed that the supply-side structural reform is focused on system reform, structure adjustment, and enterprise transformation. All kinds of enterprises should be the principal entities to implement the supply-side structural reform and they should make improvements at least in the following aspects. Firstly, the enterprises should insist on enhancing the internal strength, improving the quality and efficiency, and promoting the ability of effective supply. Secondly, they should adhere to the innovation-driven mode, actively cultivate the new power for development, and create new competitive advantages continually. Thirdly, they should follow the market rules, and unswervingly deal with the “zombie enterprises” as well as reduce the excess capacity. Lastly, it is necessary to let the state-owned enterprises play a leading role in the supply-side structural reform, and constantly enhance their vitality, influence and risk resistance capacity.

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