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Zhang Gaoli: How to Comprehend China's Promoting Supply-side Structural Reform

On March 24, 2017, Member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee and Vice Premier Zhang Gaoli elaborated on the policy of promoting supply-side structural reform when meeting with the Chinese and foreign entrepreneurs present at the Boao Forum for Asia Annual Conference 2017 in Boao, Hainan.

Zhang Gaoli said that the major problems accumulated in China's economic development are structural problems. The supply structure cannot meet the new requirements of the upgraded consumption structure. We need to advance the supply-side structural reform to meet people's growing material living needs, achieve economic transformation and upgrading, improve quality and efficiency, and enhance China's overall competitiveness. We need to make efforts to achieve the five major tasks: cut overcapacity, reduce inventory, deleverage financing, reduce cost and strengthen weak links. This year we will further cut the production capacity of steel and coal by approximately 50 million tons and more than 150 million tons respectively, and reduce coal power production capacity by more than 50 million kilowatts through eliminating, closing down some coal power plants and putting off the construction of coal power plants. We will de-stock the excess supply in the real estate markets of the third- and fourth-tier cities while prevent housing prices in hot-spot cities from rising too fast. Effective measures will be taken in deleveraging to reduce the burden of enterprises. We will focus on strengthening weak links, expand consumption centering on improving people's livelihood, speed up the development of service and consumption, and support social forces to provide services including education, old-age care and health care. We will promote the construction of major projects concerning water conservation, rail transportation, civil aviation and telecommunication infrastructure construction, and vitalize social investment to facilitate its steady growth.

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