In November 2015, when the Supreme Leader presided over the 11th meeting of the Central Financial and Economic Leading Group, he stressed that while moderately expanding the total demand, efforts should be made to strengthen the structural reform of the supply side, improve the quality and efficiency of the supply system, enhance the momentum of sustained economic growth, and promote the overall leap of China’s social productivity level. This is the first time that the supreme leader comrade has put forward a major proposition of supply-side structural reform. The Central Economic Work Conference held at the end of 2015 clarified the key tasks of supply-side structural reform "three to one, one reduction and one supplement". The Central Economic Work Conference held at the end of 2016 and the important speeches made by the top leaders at the 38th collective study in the Political Bureau of the Central Committee and the 15th meeting of the Central Financial and Economic Leading Group further enriched the theoretical and practical connotation of the supply-side structural reform, and provided scientific guidance for further promoting the supply-side structural reform. The supply-side structural reform is connected with the new normal of economic development, and the other is connected with the reform of economic system, which has deepened the reform in an all-round way and integrated development and reform. The implementation for more than a year has significantly promoted the adjustment of China’s economic structure and promoted the quality and efficiency of development. Comrade Supreme Leader profoundly pointed out that the structural reform on the supply side is a tough battle with a long-term relationship with the overall situation. We should further deepen our understanding of supply-side structural reform, firmly grasp the main line of supply-side structural reform, and strive to win this tough battle.
Continuous development: actively adapting to and leading the new normal of economic development
Since the 18th National Congress of the Communist Party of China, under the background of profound changes in the economic situation at home and abroad, the CPC Central Committee with the Supreme Leader as the core has made a major judgment that China’s economic development has entered a new normal in due course. The word "new" just reveals that the economic environment we are in is very different from the past. Understanding, grasping and leading the new normal has become the great logic of doing a good job in economic work at present and in the future. Judging the economic situation with the big logic of the new normal will find that:
Since we are facing the new normal of economic development instead of the old normal, it is the only choice to embark on a new way of economic work and build a new pattern of macroeconomic regulation and control based on the realistic national conditions that China’s economy is evolving to a more advanced stage with more complicated division of labor and more reasonable structure.
Since the prominent contradictions and problems faced by China’s current economic operation are mainly caused by structural factors, which are not cyclical factors and aggregate factors, the economic cycle is not smooth due to major structural imbalances; There are structural problems on both sides of supply and demand, but the main aspect of contradictions is on the supply side. So, focusing on solving these outstanding contradictions and problems that are very different from the past and finding a way out from the supply side and structural adjustment will of course become a new focus of macroeconomic policy.
Since the fundamental cause of these major structural imbalances lies in institutional obstacles, in the failure of the market to fully play a decisive role in resource allocation, and in the failure to better play the role of the government, it is undoubtedly a new foothold for macroeconomic policies to break through institutional obstacles and achieve a new dynamic balance between supply and demand by means of reform.
These changes can be summed up as follows: compared with the previous macro-economic management based on aggregate adjustment and focusing on the demand side, and mainly relying on policy operation, the macro-economic management under the new normal should be based on structural adjustment and focus on the supply side, and be implemented mainly through reform.
The major proposition of supply-side structural reform is formed and evolved into the main line of economic work under such conditions and based on such scientific judgment. That is to say, supply-side structural reform is closely linked to the new normal of economic development. It is precisely because economic development has entered a new normal that supply-side structural reforms must be implemented; Supply-side structural reform can only be truly implemented if it is based on adapting to and leading the new normal of economic development.
One-stop reform: traction and promotion of comprehensive deepening reform
Standing at a new historical starting point, the biggest difference between the comprehensive deepening reform deployed by the Third Plenary Session of the 18th CPC Central Committee and the previous reforms is that it is not a reform in a certain field, nor a reform in a few fields, but a reform covering economic system, political system, cultural system, social system, ecological civilization system and other fields, involving both productive forces and relations of production, economic base and superstructure. It is systematic, holistic and coordinated. Setting the direction, choosing the key points, seeking the layout, and promoting the reform in important areas and key links as a whole around enhancing the systematicness, integrity and synergy of reform are obviously the central issues that cannot be avoided and bypassed in comprehensively deepening reform.
Since it is a comprehensive reform, it is necessary to make an overall plan for what the reform in various fields is ultimately for and what kind of overall effect it will achieve. In view of the fact that comprehensive deepening reform involves a series of institutional and institutional transformations, each reform will affect or affect other reforms, and each reform also needs the cooperation of other reforms. The goal put forward around comprehensive deepening reform cannot only cover one or a few fields, but should cover all fields and dominate all fields. Therefore, the Third Plenary Session of the 18th CPC Central Committee established "perfecting and developing the Socialism with Chinese characteristics system and promoting the modernization of the national governance system and governance capacity" as the overall goal of comprehensively deepening reform.
Since we are aiming at such an overall goal to deepen the reform in an all-round way, we need to choose the breakthrough point and main clue in the linkage and integration of reforms in various fields and promote them with emphasis. China’s reform focuses on the reform of the economic system, and comprehensively deepening the reform is initiated on the basis of the remarkable achievements in the economic system reform and the establishment of the socialist market economic system. No matter from which aspect, in order to achieve the overall effect of reform and form the overall effect of reform in the linkage of economic, political, cultural, social and ecological civilization, so as to realize the modernization of state governance, economic system reform is still a reform field with "bull’s nose" effect. This means that to comprehensively deepen reform, we should take economic system reform as the focus of traction and promotion of reforms in various fields.
Now that we have entered the new normal of economic development and noticed the objective fact that the new normal of economic development is closely related to the supply-side structural reform, it is not difficult to find that both the promotion of economic system reform and the comprehensive deepening of reform are inseparable from the supply-side structural reform. Information from all sides also shows that most of the key points and difficulties in China’s current economic system reform are either on the supply side or on the structure, which are intertwined with the supply side and structural problems. For example, the core issue of economic system reform is to properly handle the relationship between the government and the market, so that the market can play a decisive role in resource allocation and better play the role of the government. Among them, whether it is the role of the market in resource allocation, the role of the government, or the coordination of the two, it is a supply-side and structural issue. It can be seen that to promote comprehensive and deepening reform with the focus on economic system reform, we can only and must start from the supply-side structural reform and start around the main line of supply-side structural reform; Reform and development can only and must be closely linked, seeking development through reform and seeking reform through development.
Structural reform from the supply side — Economic system reform — It can be clearly seen from the relationship chain of comprehensive deepening reform that we should continue to deepen the economic system reform with the supply-side structural reform as the main line, and further promote the "three to one, one reduction and one supplement" with reform methods, take deepening decentralization, combining management with optimization of service reform as the important content of the supply-side structural reform, and continuously increase the effective supply including institutional supply, which is the only way for us to promote comprehensive deepening reform under the new normal of economic development.
Preventing "Old Wine in New Bottles": Deepening the structural reform of supply side must rely on new ideas, new ideas and new strategies.
The supply-side structural reform integrates development and reform, which not only reflects the requirements of the economic policy framework that adapts to the new normal of economic development, but also connects with the overall deployment of comprehensively deepening reform. Supply-side structural reform is a major innovation to adapt to and lead the new normal of economic development, and an active choice to adapt to the new situation of comprehensive national strength competition after the international financial crisis. It is extremely important and crucial to win the supply-side structural reform, which has a bearing on the overall situation and the long-term battle.
It is not easy to further deepen the supply-side structural reform under the background of the new normal of economic development and comprehensive deepening reform. In view of the changes in the prominent contradictions and problems we are facing, one problem that needs special attention and key prevention at present is "old wine in new bottles" — — Use inertial thinking to face the new situation and copy customary practices to deal with new problems; At present, an extremely important and urgent task is to comprehensively and systematically adjust the ideas, thoughts and strategies that were used to in the past, unify thoughts and actions into the major policies and decision-making arrangements of the CPC Central Committee, and promote and deepen the supply-side structural reform under the guidance of the new ideas, new ideas and new strategies of the CPC Central Committee for governing the country.
For example, go to capacity. De-capacity, which ranks first in the five major tasks of supply-side structural reform, cannot be equated with the previous "de-capacity", and it cannot be implemented by government administrative means. Overcapacity is the root of all contradictions and problems, and resolving the problem of overcapacity is a major issue that cannot be bypassed in any case. However, de-capacity should and must be based on market regulation and focus on improving the institutional mechanism that makes the market play a decisive role in resource allocation.
For example, reducing costs. It should be recognized that the main purpose of reducing the tax burden of enterprises at present is to reduce the cost of enterprises and improve the quality of supply. It is a structural adjustment rather than a total adjustment, and the focus falls on the supply side rather than the demand side. Therefore, tax reduction and fee reduction must not follow the previous "borrowing money" routine — — By expanding the deficit and issuing additional treasury bonds to support tax reduction and fee reduction, we should implement the linkage between tax reduction and fee reduction and government expenditure reduction, so as to make room for enterprises to reduce the tax burden by reducing the scale of government expenditure. Only in this way can the tax burden of enterprises be truly reduced and the pattern of resource allocation be changed in favor of enterprises.
For example, make up the short board. As one of the important tasks of supply-side structural reform, we must not simply adopt the method of "adding more water to the surface and adding more water to the surface", but should recognize that the trade-off between manufacturing and service industries is a regular change in industrial structure; Nor can we simply start with maintaining growth and expanding investment, but we should realize that improving people’s livelihood and doing a good job of basic people’s livelihood protection are important areas that need the government to play a better role. The short board should be based on the new normal of economic development, cut in from the important areas and key links that seriously restrict economic and social development, and cut in from the outstanding problems that the people urgently need to solve, which not only complements the hard short board but also complements the short board of development and system.
Such as macroeconomic policies. In view of the fact that we have initially formed a policy system with the new development concept as the guide and the supply-side structural reform as the main line, the supply-side structural reform must not be satisfied with the previous paradigm of "acting against the wind" — — We should tighten when the economy is overheated and expand when it is cold. Instead, we should get rid of the limitations of policy adjustment, skillfully combine policy adjustment with institutional arrangements, and realize a new dynamic balance between supply and demand through reform.
The above examples are intended to show that the new normal of economic development is different from the old normal of economic development, comprehensive deepening reform is different from simple economic system reform, and supply-side structural reform is different from demand management and regulation. Only by promoting and deepening the supply-side structural reform under the guidance of the new ideas, new ideas and new strategies of the Party Central Committee in governing the country can we win this tough battle, and promote the implementation of economic policies that adapt to the new normal of economic development and comprehensively deepen the realization of reform goals, thus promoting the development of China’s economy in a higher quality, more efficient, fairer and more sustainable direction.
(The author is Gao Peiyong, a member of the Chinese Academy of Social Sciences and a researcher at the Socialism with Chinese characteristics Theoretical System Research Center)