What they say

"Supply-side" reform was highlighted at the conference. In the United States, the reform is largely equivalent to tax cuts. In China, the most discussed issue is the destocking and elimination of zombie firms. But I think State-owned enterprise reform is "genuine" supply-side reform. If we boast supply-side reform while ignoring SOE reform, it's dodging the most important issue. Why is SOE reform an imperative? Although economic output accounts for just a quarter of total output, resource misallocation incurred by them is across the board. If 10 percent of SOE equity undergoes mixed-ownership reform per year, annual GDP growth could be lifted by 0.5 percentage points within 10 years.

Zhang Wenkui,

China has already entered the deflation cycle. To get out of the cycle, you have to take a four-step approach: destocking, shed excessive capacity, liquidation and find a new growth engine. We are still in the "destocking" phase, and shedding capacity has just begun. On the other hand, demand should also be boosted through monetary easing and a proactive fiscal policy.