Interview With Zhao Yao: China Is Pushing Forward The Reform Of Supply Side.

May 24th, Professor of business school, Rutgers University, USA

In an interview, said that after more than 30 years of reform and opening up, mainly demand oriented rapid development, China's current economic supply and demand does not match the contradiction has been more prominent.

With China's economy entering a new normal, it is timely to push forward the supply side reform aimed at improving quality and efficiency.

Zhao Yao believes that one side is the serious excess of capacity in steel and other industries. On the other hand, the Chinese consumers are buying from the Japanese toilet lid to the Australian milk powder. When China pushes economic growth to consumption pformation, the contradiction between supply and demand does not match. The solution to this dislocation contradiction will be an important task of the supply side reform.

Zhao Yao said that the core of the supply side reform is to pform from scale expansion to efficiency improvement, which coincides with the inherent requirements of China's economy entering the new normal.

Zhao Yao believes that from the perspective of stimulating the vitality of enterprises, the current China

Emphasis should be laid on the following aspects: first, break the market barriers and establish a unified national market; enhance the overall operation level of Chinese enterprises through expanding market capacity and stimulating competition; two, optimize the national pport network, improve the efficiency of supply chain by reducing logistics costs; three, rationally reduce the burden on enterprises' taxes and fees, strengthen anti-corruption and enhance policy pparency, reduce the hidden costs of enterprises; four, eliminate monopoly, encourage competition and support SMEs; five, vigorously develop new industries, improve the innovation environment, and enhance the position of Chinese enterprises in the global industrial chain by increasing the added value of products.

Zhao Yao believes that the main difficulty for China to push forward the supply side reform is to go to capacity. Some upstream industries such as steel, cement, coal, non-ferrous metals, glass and so on are duplicated, inefficient and unreasonable.

He suggested that the production capacity be combined with the reform of state-owned enterprises to establish an effective exit mechanism for excess capacity.

Zhao Yao said that the supply side reform is a system engineering, not only refers to the improvement of production links, improve supporting policies, improve business environment and other initiatives need to follow up in time.

For example, clearing excess capacity, requiring effective social security and re employment system to protect, and encouraging innovation means that the protection mechanism of intellectual property rights needs to be further strengthened. Quality and efficiency enhancement also requires corresponding promotion of market standards and regulatory mechanisms.

Zhao Yao said that in terms of economic theory, the demand side thinks that economic growth or output is determined by the total demand, namely consumption, investment and export, but the change of aggregate demand tends to be short term, and the cyclical characteristics are obvious. The factors of supply side, from labor quality, technology to efficiency, represent a long-term trend and have a far-reaching impact on the economy.

The two party is not isolated, and should be based on the policy adjustment process.

Organic combination.

Zhao Yao is confident that China's economic development will be driven by the supply side reform.

He said that there is no technical insurmountable gap between Chinese enterprises and world-class enterprises. In some areas, China's technology is at the leading level in the world. The gap between the big and the weak in some industries is mainly reflected in efficiency. This is the main gap between Chinese enterprises and the strongest enterprises in the world.

By deepening reform, improving the system and increasing competition, relying on the scale effect brought by China's huge consumption market, the potential of Chinese enterprises will be considerable.

Zhao Yao said that the supply side reform will make China's economic structure more rational, supply and demand more balanced, and will enhance the efficiency of production and global competitiveness of enterprises.

Through the supply side reform, China's economy will still be able to maintain high and medium speed development in the future.