Business / Policy Watch

Economic reform remains at top of Party's agenda

By Zheng Yangpeng (China Daily) Updated: 2014-07-30 04:31

The country's top decision-making body said on Tuesday that reform remains its key priority after it met to discuss the progress of the economy.

The Political Bureau of the Communist Party of China's Central Committee held closed-door talks to review performance in the first half of 2014 and map out macroeconomic strategies for the remainder of the year.

"We will continue to regard reform as the key agenda among all other important items," said a statement issued by the panel of top-ranking officials after the meeting.

"Focusing on the goals of growth, structural adjustment, improved livelihoods and risk prevention, we will push forward reform and stimulate the dynamics of the market."

The statement said the continuity and stability of the current macroeconomic policy will be maintained. More importance will be attached to "targeted control and adjustment", and measures will be rolled out that are conducive to both short-term growth and long-term benefits.

The measures will include strengthening the protection of intellectual property rights and deepening the reform of the investment regime.

The statement called for the urgent establishment of competitive businesses in industries that are monopolies, and faster expansion of the service sector.

It said there should be a combination of "liberalizing" and "administration", together with enhanced market supervision.

Kuang Xianming, director of the Research Center for Economy at the China Institute for Reform and Development, said the message from the meeting is that the pace of reform could quicken in the remainder of the year.

"On the one hand, the pressure on growth will be greater if there are no reform measures such as the simplification of administrative approvals in the first half," he said.

"On the other hand, problems in the economy remain salient and the economic growth model has not been significantly shifted. For example, consumption in the first half was sluggish despite its huge potential."

The Political Bureau said it is content with the economic performance in the first half. Key economic data fell within expectations, and the level of growth is steadily improving.

Turning to the second half, it said development challenges remain and extra efforts are needed to keep the economy stable.

However, it stopped short of calling for more stimulus measures to prop up growth, which some were expecting, and instead stressed the need for reforms that are in line with a long-term vision.

GDP growth fell to an 18-month low of 7.4 percent in the first quarter, prompting a shift in emphasis by the government toward fine-tuning to prevent a further drop.

A raft of policies helped push up second-quarter growth to 7.5 percent, and economists expect to see a continuing recovery in the third quarter.

This has given the leadership more leeway to focus on reform and rebalancing the economy.

The Political Bureau said a "certain growth rate" is needed as "many issues will not be solved" without it, but it also said growth should be "scientific", "sustainable" and "inclusive".

In a sign of a greater emphasis on long-term growth potential, President Xi Jinping told non-Party representatives in a separate meeting on Tuesday that China should improve its innovation-driven capacity, enhance its industrial competitiveness and increase its growth quality.

Xi discussed several long-term issues, including rural land reform, capital market development and healthcare reform.


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