ANNUAL REPORT

40
Key Government Statements on Economic Reform
Third Plenum Decision (November 2013): 36
We must deepen economic system reform by centering on
the decisive role of the market in allocating resources, adhere
to and improve the basic economic system, accelerate
the improvement of the modern market system, macro-control
system and open economic system.
The basic economic system with public ownership playing
a dominant role and different economic sectors developing
side by side is an important pillar of the socialist system
with Chinese characteristics and is the foundation of the
socialist market economy. Both the public and nonpublic
sectors are key components of the socialist market economy,
and are important bases for the economic and social development
of China. We must unswervingly consolidate and
develop the public economy, persist in the dominant position
of public ownership, give full play to the leading role of
the state-owned sector, and continuously increase its vitality,
controlling force and influence. We must unwaveringly encourage,
support and guide the development of the nonpublic
sector, and stimulate its dynamism and creativity.
Guiding Opinion on Deepening the Reform of State-Owned Enterprises
(September 2015): 37
The fundamental requirement for deepening SOE reform
is to uphold and improve the basic economic system. We
must unswervingly consolidate and develop the public
economy, and unswervingly encourage, support, and
guide the development of the nonpublic economy. We must
uphold the dominant position of public ownership and
develop the leading role of the state-owned economy.
China’s Supply-Side Structural Reforms
Chinese President and General Secretary of the CCP Xi Jinping
has made “supply-side structural reform” the dominant
theme of economic policy in 2016, after announcing it during the
Central Economic Work Conference last December. 38 In the Chinese
context, supply-side reform has become an umbrella term
for structural reforms: the main thrust of the reforms, according
to President Xi, is “to reduce ineffective supply, increase effective
supply, and make the supply structure more fitting to the demand
structure.” 39 President Xi differentiates China’s version of “supply-side
structural reform” from Western supply-side economics:
the end goal of Chinese reform, according to President Xi, is not
“small government, big market,” but “effective government and
effective markets.” 40 Key elements of the policy include cutting
excess industrial capacity and housing inventories, deleveraging,
and reducing business costs. 41 The central government has put
the onus on local governments to work out how to operationalize
and implement these broad policy planks. 42