Key reforms to help unleash growth potential
China’s economy grew 6.7 percent year-on-year in 2016, its slowest growth in 26 years. Yet still within the government’s target range set for the year, official data showed on Jan 20.
As to the economy this year, the tone-setting Central Economic Work Conference in mid-December gave priority for the year to the pursuit of economic advancement while maintaining stability.
That means that maintaining economic growth will still be top of China’s economic agenda for 2017. Some may argue that since China’s economy has remained on an upward trajectory, its previous relatively loose monetary and proactive fiscal policies should be brought to an end. However, China’s economy is still slowing and a certain scale of monetary oversupply and fiscal inputs are necessary to maintain the required level of economic growth in 2017. The only quantitative economic target for the 13th Five-Year Plan (2016-20) period is to double the country’s per capita disposable income by 2020 from the 2010 level. For that goal to be attained the average economic growth rate must be no less than 6.5 percent during the five-year period.
Despite the efforts that need to be made to maintain the required level of economic growth in 2017, China also has to advance its industrial structural adjustments. As President Xi Jinping said at the Central Economic Work Conference in December, one does not take precedence over the other, they are of equal importance. Thus, the country has to find breakthrough areas if both tasks are to be done well.