China Focus: Flexible growth as structural reform gains steam
Take me away, mom Animals on the Road	“Water Margin” on eggs Cat the occupier Adorable animals pose like stars Cuddle up together, battling against blizzard Sunshine in the life

 

 A worker collects rice at a corn processing factory in Linghai, northeast China's Liaoning Province, Nov. 19, 2015. China's economy grew by 6.9 percent in 2015. (Xinhua file photo/Yang Qing)

Local governments in China have set flexible growth ranges as they gear up for structural reform.

Of all the GDP growth targets of 31 provincial regions this year, nine have set "growth ranges" instead of specific numbers, according to a report carried this week by the China News Service.

Shandong, Jiangsu and Guangxi all set their growth targets between 7.5 percent to 8 percent, while Guangdong, Zhejiang and Hainan set theirs from 7 percent to 7.5 percent, according to the report. Shanghai and Jilin set theirs between 6.5 percent and 7 percent, while Heilongjiang has the lowest target of 6 percent to 6.5 percent.

"Premier Li Keqiang mentioned the concept of a 'reasonable range' in the 2014 government work report, but this is the first time that multiple local governments have set ranges," Li Xuesong, a researcher with the Chinese Academy of Social Sciences, told newspaper "China Times."

Flexible growth ranges are part of structural reform as China's economy slows. China's economy grew by 6.9 percent year on year in 2015, its slowest annual expansion in a quarter of a century.

Many localities in China are already experiencing a slowdown. Growth of Liaoning Province, for example, dipped to a mere 3 percent last year. The northeastern province, heavily dependent on heavy industry, used to support China's economy with great economic growth.

"Pursuing GDP growth by measures such as expanding capacity and encouraging the property market is not sustainable," said Sun Zhiming, head of the Jilin Academy of Social Sciences. "Structural changes are inevitable."

Cutting overcapacity and destocking could cause temporary economic fluctuations, which is why the ranges are needed. Sun added that flexible ranges leave more room for structural reform and industry upgrade.

"With flexible targets, local governments can focus more on structural reform, which will be beneficial for longer-term development," said Ding Yuanzhu of the Chinese Academy of Governance. National GDP growth may also be set within a flexible range, Ding said.

Structural reform is gaining steam in China. This year, many provinces and municipalities have plans to cut overcapacity, de-leverage and reduce housing inventories. For instance, in east China's Anhui Province, the government will "properly handle overcapacity," "lower costs for enterprises" and "enhance consumption."

In Anhui, many major industries -- steel, coal, cement and iron ore -- are facing excess capacity. Last year, the Magang Group Co. Ltd., a major iron and steel producer, suffered several billion yuan (1 billion yuan=150 million U.S. dollars) in losses.

In northeast China, where growth is the weakest, officials plan to bring their economies back on track with the service industry. For instance, in Jilin skiing is seen as a source of growth. Miaoxiangshan Skiing Resort has recently been branded a national skiing field, becoming a favorite winter holiday spot.

"In the past, people in Jilin could only go to the Jingyuetan Ski Resort to experience the fun of skiing, but now many similar resorts have sprung up," said Wang Yong of Miaoxiangshan resort.

"Setting flexible growth targets, cutting overcapacity and promoting the service industry all form part of structural reform, which will help China out of the slowdown in the long run," Sun Zhiming said.

Related:

China Voice: Can China continue medium-high growth?

BEIJING, Feb. 20 (Xinhua) -- With ample development room, solid growth foundations and abundant policy tools, China is believed to be able to continue to deliver above-6.5 percent GDP expansion in the next five years.

China is and will be a developing country for some time, yet its development gap with Western countries will gradually narrow, a process that will continuously create new demand and supply.Full story

News Analysis: China's innovation, entrepreneurship help build new growth engine

China's innovation and entrepreneurship strategy will boost creativity and forge new engines in the current economic transition period, an innovation expert said.

Luo Hui, president of the National Academy of Innovation Strategy, told Xinhua that the policy has prompted a steady economy, rising employment and a push toward industrial restructuring.

"By innovation and entrepreneurship, China can wean itself off excessive reliance on natural resources and steer to a path blazed by human intelligence," she said. "In this way, medium-high growth will be maintained and the economy lifted to a higher level."

Grappling with an unavoidable slowdown after decades of rapid advance, China is counting on mass innovation and entrepreneurship to keep its enviable growth and handle an economic overhaul at the same time.

Weighed down by the property market, falling exports and weak investment, GDP expanded 6.9 percent year on year in 2015, the slowest pace in a quarter of a century. However, figures on China's sweeping entrepreneurial wave told another story.

China saw a record startup boom in 2015 as a total of 4.44 million companies were established, up 21.6 percent from a year ago. More than 80 percent of the new firms were in tertiary industries.

The boom came after government efforts to encourage people to open their own businesses, including easier market entry, less red tape and tax breaks. College students, overseas returnees and even migrant workers are emerging as major forces in entrepreneurship.

Emerging industries, the most attractive sectors for startups, accounted for 8 percent of China's GDP.

"The wave is likely to continue in the coming years as there is still ample room for improvement," said Zhou Shiping, an official with the State Administration for Industry and Commerce. He explained that there are 16 companies for every 1,000 people in China, much lower than 44 in Germany, 43 in Japan and 26 in the United States.

China has been increasing policy support for new businesses, especially in their starting period.

The government will establish innovation platforms and encourage enterprises and universities to build more makerspaces, said a statement released after an executive meeting of the State Council presided over by Premier Li Keqiang on Feb. 3.

There were more than 2,500 incubators for high-tech businesses and over 4,000 innovation bases by the end of 2015, data showed.

By promoting innovation and entrepreneurship, China can not only create jobs and prop up growth but also bring vitality to society and build a fair business environment where diligent people can realize their dreams, Luo said.

Author： 　　　Source：xinhua　　　 Editor：Yang Fan