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Guidelines of economic reform in 2017

Updated: Apr 18,2017 9:29 PM

The State Council on April 18 issued a guideline on China’s economic reform in 2017, which regards supply-side structural reform as key.

The guideline vows to continue cutting excessive capacity in steel, coal, coal power, and other industries, and reduce inventory in the real estate market.

Leverage ratios in enterprises, especially in state-owned ones, were asked to be cut, and meanwhile multiple measures should be in place to help lower business costs, including taxes and administrative fees.

According to the guideline, the government will cut more administrative permits and licenses for businesses and ease market access. Government’s supervision in the market will be enhanced to build a better social credit system.

Pricing reform will continue for electricity, gas, agricultural irrigation, railway transportation and aviation.

Meanwhile, reform of state-owned enterprises will be enhanced.

An effective and balanced corporate governance structure will be promoted in central SOEs with the setting up of boards of directors and diversified ownership structure. Non-state-owned investment will be allowed in some SOEs to build a mixed ownership pattern.

In particular, SOE reform in the electricity, petroleum, gas and salt production industries will be accelerated.

The guideline urged more policies to protect intellectual property rights and encourage more quality public services.

Fiscal duties of central and local governments will be clarified and streamlined, and value-added tax reform will be optimized into a briefer structure.

Finance reform will continue with efforts to form market-oriented interest and exchange rates, and improve financial institutions and supervision, as well as the capital and insurance market.

Banks will be encouraged to develop inclusive finance, offering more capital to small and medium companies and agriculture.

The guideline also called for coordinated development between urban and rural areas, with work done to support supply-side reform in agriculture.

In addition, measures also were issued to stimulate innovation, promote an open economy and reform pension management, education, healthcare, the culture industry and environmental protection.

A total of 115 tasks were listed, with each task the responsibility of one or several departments.