(
YicaiGlobal)
Dec. 12 – A recent meeting of the Politburo of the CPC Central
Committee on economic operations in 2017 called for more active efforts
to revitalize the real economy and foster new economic growth drivers.
For many experts, the decision of the meeting sends out a strong signal
for robust efforts to boost industrial development.
In China, the last meeting of the Politburo each year focuses on
economic operations for the following year and is of particular
importance in that it sets the tone for the upcoming central economic
working conference, which is considered to be the main indicator for the
upcoming economic trends in the new year. The central financial working
conference is held every five years, and the next one may take place
later this year or early 2017, according to an informed source.
Real economy revitalization
“Manufacturing is the main battlefield for revitalizing the real
economy. The existing manufacturing businesses are a critical factor,
and innovation is the central task,” said Li Beiguang, deputy director
of the planning department of the ministry of industry and information
technology (MIIT), during an interview with the state-run Xinhua News
Agency. Efforts will be made to promote emerging industries and, more
importantly, to boost the progression of traditional industries through
innovation.
China already takes on some of the challenges. According to the
Intelligent Manufacturing Development Plan (2016-2020) issued by MIIT on
Dec. 7, production will be digitalized in key traditional manufacturing
industries by 2020, and the transition toward intelligent manufacturing
will be completed in most key industries by 2025.
Upgrading the Chinese manufacturing sector is an issue closely linked
with state-owned enterprises – the largest manufacturers in China. The
central government has started mergers and business reorganizations of
major SOEs this year in a bid to improve their competitiveness.
Furthermore, the State-Owned Assets Supervision and Administration
Commission (SASAC) of the State Council is actively deliberating and
developing implementation plans for SOE reforms in 2017, said SASAC vice
chairman, Zhang Xiwu.
Keeping assets bubble in check
Although only less than 600 Chinese characters were used in declaring
the outcome of Politburo discussions about economic operations in 2017,
they convey a significant amount of information and messages, Xinhua
reported. It made a special reference to the preservation of stability,
saying that making progress while ensuring stability is an important
principle for state affairs management in China, and is particularly
relevant to economic operations next year. We should strive for
breakthroughs in key areas, while maintaining social stability.
“Making progress while ensuring stability will remain the main theme.
Fiscal and monetary policies will continue to focus on economic growth
stabilization, which is described as the top priority for 2017,” Xu
Hongcai, deputy chief economist at China Center for International
Economic Exchanges, told Yicai Global.
Ensuring stability involves “keeping assets bubbles in check,” and
guarding against financial risks. The term was first proposed during the
Politburo meeting in July 2016; and the requirement was reiterated at
the level of monetary policymaking during the October meeting. It
stressed, “While ensuring reasonably accommodative liquidity, attention
should be paid to curbing assets bubbles and preventing economic and
financial risks.”The central government clearly intends to tighten its
grip over financial risks.
Since the launch of the crackdown on financial risks in internet
finance businesses last April, the overall level of risks associated
with the internet finance has been curbed, and the upsurge in the
frequency of risk incidents has been contained, said a PBOC official on
Dec. 9. Currently, the focus of the crackdown is to clean up high-risk
businesses and rectify issues discovered.
The real estate sector is considered to be the main battlefield for
the fight against assets bubbles. Many local governments have introduced
new regulations in property markets. As an indication of the future
trends for the real estate industry, the politburo meeting asked efforts
should be made to speed up the introduction of a long-term mechanism to
ensure steady and healthy development of the real estate sector in line
with the actual situation in China and the relevant laws of the market
economy.
Conditions for stabilization of the Chinese economy have gradually
improved, but particular attention needs to be paid to risks in the real
estate and financial sectors to prevent them from building up or
spreading further; and the risks should be gradually reduced through
deepening structural reforms, said Wang Yiming, deputy director of the
Development Research Center of the State Council.
