China economy 2016 in ten key phrases
Supply-side structural reform
“Supply-side structural reform” is now a catchphrase in China. Throughout the year, the authorities pushed forward five tasks: cutting industrial capacity, reducing the housing inventory, lowering leverage, cutting corporate costs and improving weak economic links.
The reform has steadily progressed since policymakers proposed it at the end of 2015. A large number of zombie enterprises were shut down this year. Industries plagued by overcapacity and lagging technology must now move up the value chain to stay competitive.
China’s capital market fluctuations at the start of 2016 signaled it was going to be a tough year. However, despite the rocky start, the economy is ending the year on a firm footing, and this year’s growth target will be met.
In the first three quarters, GDP growth was 6.7 percent, within the government’s target of between 6.5 and 7 percent.
At the Central Economic Work Conference held earlier this month, China’s leaders said the economy has stayed in a proper range in 2016, but with more quality and efficiency.
Looking back at the economic priorities set for 2016, industrial overcapacity was always going to be a key battlefield.