Supply-side structural reform
The supply-side structural reform is a Chinese economic policy introduced in November 2015 by General Secretary Xi Jinping at the 11th plenary session of the Central Financial and Economic Affairs Commission. The policy aims to "cut overcapacity, reduce inventory, deleveraging, reduce costs, and fill in the gaps",[1] collectively abbreviated as "Three Reductions, One Lowering, and One Supplement". It also stipulates lowering taxes, closing down coal, steel and cement factories inducing overcapacity, alongside stricter control over credits and subsidies in the industries with overcapacity. Liu He, director of the Central Financial Office, introduced this concept earlier in October 2015 when surveying in Guangdong, pointing out the necessity of "supply-side reform", and the need to quickly eliminate "zombie enterprises" to reduce overcapacity.[2]
During the 2008 financial crisis, Wen Jiabao, then Premier of China pushed for a 4 trillion yuan investment plan, which has since led to a serious overcapacity in related production capacity. For example, China's steel production has reached more than twice the total production of Japan, India, the United States and Russia combined. It is in this context that supply-side structural reform was proposed.[3]
References
[edit]- ^ "透视中国:经济"供给侧改革"会成功吗?". BBC. Archived from the original on 2020-07-17. Retrieved 2020-07-17.
- ^ "「供給側改革」如何挽救中國經濟?". 端傳媒. Archived from the original on 2021-07-17. Retrieved 2020-07-17.
- ^ "习近平供给侧改革,一个里根式的口号". 紐約時報. Archived from the original on 2021-08-03. Retrieved 2020-07-16.